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Published On: Thu, Aug 22nd, 2019

Legitimate Ways to Build an Emergency Fund

Building an emergency fund takes a lot of time and dedication, but having one is a necessity. It’s a way to prepare for anything that life may throw at you without having to worry about finances when it happens. Having one will keep you from adding to any debt you have accumulated, and can help out if you become unemployed. We often don’t like to think of the bad days in which we will need some extra cash to pay for damage or unexpected expenses. However, it’s inevitable that at some point, you’ll need it. An emergency fund provides you with a financial buffer for any time you are struggling. It allows you to stay afloat in a time of need without having to rely on high-interest loans or credit cards. Plus, one of the first steps to becoming financially stable is to have a rainy-day fund.

It’s challenging to build up your fund, especially with a family. However, below are a few ways you can save in no time. 

photo/Gerd Altmann

Send money and forget about it

Resist any urge to transfer money into an emergency fund account and take it out at the end of the month when you’ve spent all your cash on meals out. After you’ve sent the money into the savings, forget it even exists. Think of it as an extra bill or expense that has to fit into your budget every month. Whatever remains in your current account after it’s been sent is what you have to live on. You must live to your means. Those who save but take out their savings whenever they need it will fail to build up a substantial amount that is required for an emergency fund.  

Find income opportunities

There is a world of endless possibilities when it comes to finding extra income. You can do something simple like filling in online surveys, setting up your own business, or even investing in property. All of these will help you create another source of savings. You can stock up your emergency fund with the remaining income you get from your side hustle. This is a more natural way to build up an emergency fund without the worry it will impact your outgoings. Property investment of buy to let developments is a particular favourite among millennials who are wanting to build an emergency fund. Experts RW Invest suggest that having another income such as property can provide individuals with financial freedom sooner than they could ever since. Companies like these can help anyone who is looking to earn an extra income from rental payments, even if you’ve never done it before. 

Sell things you don’t need

Take a look around your house and find things that you no longer need or use. Hoarding items isn’t the best way to live anyways. Assign a few hours out of your day to find things within your home you could sell, from toys to exercise equipment. After this, you can convert this into cash. It’s one of the simplest ways to get some extra money for your emergency fund. 

Make cuts to your budget

If you like to manage your money, you will most likely have a budget for every month/week. However, revising your budget every few months can improve your finances entirely. Despite only small cuts being made, you will see a huge difference when everything is combined. Turn down your thermostat a few degrees or even try a shorter shower time to reduce water consumption. These results can improve your finances and quality of life too.

Author: Olivia Hanlon

On the DISPATCH: Headlines  Local  Opinion

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