Sometimes our cash we get each month already has its post. It makes us feel that there is no room to save money for an emergency fund. That’s why it sounds quite intimidating to save some months’ expense for it since there is no available cash left.
Let say that your living expense is $2,000 every month. It takes quite a lot of time to save three times of it. Why is it three times? Because many experts say that the idea of an emergency fund is usually three times our monthly living expenses.
In our article today, we have six simple steps that will help you start to build flowing cash. We hope that it can bring peace of mind and financial security you need.
Save the chunk
The key to save money prosperously is not about focusing on the total. It can be a daunting task that makes you think it’s impossible to do. However, if you save smaller parts every month, you’ll be surprised how whose chunks can make a lot amount of money. Some people usually start with a smaller amount every month. It can be from $3 to $4. Our recommendation is to save $100 every month. You’ll get around $1,200 in a year.
Cut the budget
Have you ever thought cut a budget on something that you can find another cheaper alternative? Some of the examples are like bringing your lunch, use public transportation, and unsubscribe the streaming service that you don’t have time to do it again. Once you have the daily change, you can see how much money you’ve saved. And that’s where your emergency fund you can collect. You can begin with something specific and small to which you can cut. Start to identify the expense that you can reduce and have a resolution goal to save more money.
Use technology feature
An automatic transfer feature can be an easy and helpful way to save your money directly. You can set the date of your payday and transfer some amount of money to your savings account that you use to collect your emergency fund. By doing this, you’ll save more time as well as you won’t realize that you already saved your money every month.
Be calm in debt
If you’re still struggling with paying your debt, you don’t need to be worried. Stay calm and make it a priority. Your debt that has high-interest rates should be your top list to pay first. However, if the debt has lower rates as well as it is easier to manage, you can achieve both goals: paying debt and saving. Don’t forget to consider about having certain funds to save and pay debt every month.
Safely choose a bank account
You don’t only need to put your emergency fund safely but also accessible. You can still access it whenever you need it. Our recommendation is to choose a type of bank account that doesn’t require you to pay when you want to withdraw the money. And don’t pick a checking account that you can tap easily for shopping expenses. Choose a bank account that has interest-bearing and separate from your daily expense account.