Are you in a situation wherein you are in desperate need of cash because of a family member of yours got an accident? Or you need to pay the tuition fee for your child? Or you ran out of money to buy groceries? In every problem, whether big or small, there is always a solution. Money is one of the main cause of problems in life. That is why a provision of emergency funds should be implemented.
Emergency fund- this is an account for a reserved fund that is used in case there is an emergent situation most likely related to unemployment, and some unmet major expenses. The purpose of this fund is to improve the financial security of a person seeking for help. The importance of having an emergency fund is to assist you in times of crisis and need and reduce the risk of in using a high interest debt rate such as the credit card as your last resort. There are financial advisers or planners who can give you a suggestion regarding emergency fund that can cover living expenses for at least three months savings. Committing yourself to this kind of suggestion is of great help and you will find it useful once an uncertainty will come along. You should understand that an emergency fund is not spent for leisure and entertainment purposes. This means that you only get to spend your fun for emergency cases only. Building your emergency fund takes a little more time for you to achieve that certain amount that you planned for as a savings. You need the patience and at the same time a grip of yourself to not touch what you have hard saved for months. For you to establish your emergency fund, here are some tips for you to be challenged in keeping up your emergency funds till the end the appointed time.
Breaking it down- setting aside a fix amount of how much you want to save for as an emergency fund is crucial and it depends on how much money you’d allot from your salary to your funds. Target for how long will you be saving for the emergency fund.
The use of wasted money- identify your money leaks in your budget such as ordering food at a restaurant, too much electrical wiring connected and many more
Piggy Bank- funny as it may seem, piggy banks are still useful and for you to keep record jot down how much you have put in to your piggy bank. The purpose of jotting down is for you to keep track how much you have saved.
Spare change- if you happened to have all your family members involve in the putting in money at the emergency fund, it would be best to make a habit of putting in some spare change each day.
Being financially successful requires time and effort for you to have a balance life. Financial failure happens when you are not able to keep up with the set of priorities that you have planned for your life. Know your limits especially when it comes to spending money. It is better to be prepared for the future no matter what circumstances may bring.
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