Most financial experts will agree that a big step in being financially secure is to have an adequate emergency fund. This being the case it is disheartening to know that most Americans don’t have any savings at all! To start building an emergency fund first look at your monthly income and expenses and realize that most experts agree that an emergency fund needs to cover at least 3 to 6 months of house hold expenses. This will give you a sufficient cushion should an emergency such as illness or job loss become a reality.
Don’t be discouraged if that seems like a great deal to save it is completely do able and just needs to be tackled in small steps. First determine a time limit for achieving your goal in conjunction with the amount of money you know you can put away each pay cycle and make it reasonable. If you need to put away $15,000 only giving yourself 6 months may not be achievable.
If you look at your income and you just can’t see how you can possibly squeeze any money out for savings consider doing a 1 week experiment where you give up an item such as your morning coffee run or try brown bagging your lunch for a week and you may be surprised at how much extra income you really have. If not you may consider looking for additional sources of income. Do you like to craft or woodwork? You may look into selling some of your craft items. There are many ways to pick up extra income and you can ear mark all extra income to funding your emergency account.
We all know that life has a way of throwing us unexpected things but if we prepare for them now than they don’t have to feel as unexpected. Having a good financial base is important to weathering some of life’s biggest storms.