Emergency Money – Start Your Very Own Emergency Fund

A sudden flu, an unexpected travel expense, a sudden rise in utility bill often kills our financial planning and when this disaster isn’t averted quickly, financial ruin might take place. No one wants to be in debt for a long time but what other choice would is there when such unforeseen expenses persist?

It is evident that almost everyone has heard the talk about how important it is to have an emergency fund – and for good reason. We can’t always predict what life throws but we can, by all means, prepare for it the best way we can.

Having an emergency fund is not rocket science. Like most of the things in life, all it really needs is a little patience, discipline and commitment. To help get you started, here are a few tips for you to consider.

1. Calculate how much you need
The golden rule is to save enough money that will be able to cover your living expenses from four to seven months. Keep that goal in mind as you start to save for an emergency fund. Bear in mind that you should save to cover your living expenses and not your entire salary. In the four to seven months that you are living using your saved up emergency money, take note that there certain luxuries that you can no longer enjoy. A luxurious holiday or a shopping spree can not be in your to do list when living off your emergency fund.

2. Keep your savings in a trust worthy bank
The second most important thing to do when saving up for emergencies is determining the right place to put your money. Make sure your money is somewhere accessible to you in case of an emergency but too accessible or you will only be tempted to make withdrawals that are uncalled for. It would be wise for you to make a separate saving account in another bank so that there is a distinction between the money you use for everyday expenses and the money you save for when the need arises. Make sure to choose a high interest bank so you can maximize your money’s growth.

3. It’s an obligation, not an option
It would be best you make it a habit, a part of your regular budget. You would even want to consider an immediate money transfer for when your salary arrives. That way you are not tempted to spend the money that is supposed to be saved. Think of it as paying yourself first. Though it may not seem that way, when there is an emergency, you will surely be patting yourself on the back for the money you’ve saved up.

Having an emergency is indeed important, but what do you when your seven months worth of saving only lasted six? You can’t go hungry and leave your bills unpaid. In an event such as this, it is wise to consider a payday loan from a reliable lender. Tree House Loans, one the best loaning companies in the UK, can be of help. They work with UK’s largest lender to make sure you get the lowest possible interest and transparent transactions.

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