5 Tips to Increase Your Emergency Fund
Having trouble maintaining your emergency funds? Are you looking for ways to save money? You might have heard that you must have 6 months of expenses aside. For the self-employed, it might be 12 months of expenses. Do you think it is impossible to do so? You won’t be the only one to think it.
But with these simple steps, you can save a big pile of cash in your emergency fund. This will provide you peace of mind and greater financial security. You must start with a small goal and then steadily increase the goal.
Let’s take a look at the steps to jump-start your emergency fund.
Make Cuts in Your Budget
An easy way to start saving is by cutting back on expenses. You should look at your budget and cut back expenses that you don’t use. The expenses won’t bother you so much includes a subscription of cable that you don’t use. This will not only save your money but time as well. You can cancel the membership of the gym that you decided to go but don’t actually visit.
Moreover, you can cut back on eating outside. You can take your lunch from home. Prepare yourself a good meal and staying away from restaurants will save a lot of money. Reducing expenses will significantly add up a lot and jump-start your emergency fund.
Small Achievable Goals
Keeping aside huge amounts is an impossible task. It is better if you start with small goals like $50 a month. This will help you develop the habit of saving and will be easier to fulfill. Once this is achieved you can raise your target and aim at saving more.
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Carpool to Work
Another great way to save extra money is by carpooling with co-workers. With gas prices increasing, car maintenance costs risings and toll prices skyrocketing , carpooling could save money that can go directly into your emergency funds.
Get rid of a Habit
It is a great way to jump-start your emergency fund. Whether it is shoes, lattes or smoking, get rid of your habit. If you start your day with a beverage from Starbucks it will cost you $4. If you save $4 a day for a month, it will save nearly $120 and $1,440 over the course of a year. This should be a great motivational factor for saving more money.
Find your Passion
You must find few ways to make more money. What do you enjoy doing? Make a list and use your talents to make extra bucks. For instance, if you are good at cleaning, you can clean houses in your neighborhood on weekends. Another example, if you love dogs you can take your neighbor’s dog out for a walk.
There are plenty of options available for making few extra cash. This will be helpful in putting aside for emergency fund.
Therefore, don’t stop once you have reached your target. You must increase your saving goal so that you can enough amount in your emergency funds. It is best to have an emergency fund that can cover your expenses for 6 months.
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