How To Save an Emergency Fund - Personal Finance

How To Save an Emergency Fund

How many times has this kept you up at night? You need to start somewhere. Read this how to save an emergency fund article and start to feel better about it. Having an emergency fund can help you in many ways. To have a strong personal financial plan, you will want to include an emergency fund in the plan.

An emergency fund will take a lot of worry and strain off your life. This can help you focus on building real wealth and that will help money flow a whole lot easier.

Learning how to save an emergency fund will get your mind going it the correct direction and will help squash fear.

What is an Emergency Fund

An emergency fund is money you have set aside in case of emergency. A financial emergency can entail a lot of different things. Things happen in life and live is not fair. People loose there jobs and just recently there have been quite a few.

Life might throw something at you like emergency surgery, or you get sick and can’t earn money temporarily.

Your chocolate lab swallows a sock and the vet won’t do anything without money upfront. This actually happened to some friends of mine. Seven thousand dollars later, the dog was fine with a shaved belly and the cone of shame.

Your truck breaks down and you need it to do your work.

There are many other life emergencies I’m sure you can think of. The problem is, we don’t want to think of these things because they are bad. That’s part of what makes saving an emergency fund not very attractive.

Why You Should Have as Emergency Fund

Most people don’t think they could lose their job. Also, they never think about anything that could keep them from doing their job.

Since, these are things we don’t want to think about, we should have an emergency fund to take that worry away. If you aren’t worried of the thought of not making money, it can help you make more money. I know that doesn’t make sense but, hear me out.

When we are constantly worried about making money we are focused on the lack of money instead of the abundance of money. When the abundance of money is the focus, then more of it comes into our lives. Make any sense now?

So, other than the obvious reasons to have an emergency fund, another reason is so you can create more abundance. That seems to be a great reason to me.

How Much Should You Have in an Emergency Fund

There are many financial experts out there that can tell you exactly how much you should have in an emergency fund. Some say 3 to 6 months of expenses. Some say 4 to 8 months and even some say nothing less than a year of expenses.

Let’s get realistic. Most of us start with zero so it’s hard to even think about saving enough for 4 months expenses could ever happen.

It can happen! You have to start somewhere. If you can start to save just a little every month you will start to feel better about saving.

You can start to gain traction for saving every month and it will just keep going up. The more you save the better. Over time the saving becomes easier and easier. The key is to just start somewhere.

Start with a small amount. This will give you the confidence that you can actually save. Start small and build it over time. Make a realistic goal to put a certain amount in the emergency fund every week or every paycheck.

Just make sure your goal isn’t too aggressive or, you may find that you need to take money out for a non-emergency.

Where Should You Put Your Emergency Fund

One of the best places to put your emergency fund is in a high yield savings account. A high yield savings account will earn a little interest on the money you have in there over time.

You want to have the money in an account that allows you to get to it easily. After all, an emergency might not let you wait to transfer funds from the sell of stocks or bonds.

You really shouldn’t keep the cash under your bed. What if the emergency is a fire? You don’t want your emergency fund to burn up in the actual emergency.

How To Grow Your Emergency Fund

You will want to continuously grow your emergency fund so, how do you do that. First, you will want to pay off bad debt. Credit cards and personal loans. Anything that has a high interest rate attached to it.

You may have to pay these off slowly. You don’t want to use everything you have in the bank to pay them off. Keep a certain amount in your emergency fund for an emergency. Start with as little as $500 to make your feel like you are ahead in case of a small emergency.

To really save you will have to cut your expenses if you haven’t already.

See Also: 10 Tips to Save Money Fast

If your day time job isn’t getting the job done with saving an emergency fund then, it’s time to find ways to make more money.

See Also: Multiple Streams of Internet Income

You can start a side hustle to get things moving faster. Just make sure you aren’t spending a ton of money getting it going. Start something in your spare time. Man people start business in their spare time and end up quitting their day jobs.

For a business your can actually start from the ground up for free, take a look at my recommendation below.

See Also: Earn Passive Income with Affiliate Marketing

How To Save an Emergency Fund - Affiliate Marketing

Then you want to protect your assets. Identity theft is running rampant and will continue to get worse. Set yourself up to combat against it.

See Also: LifeLock Identity Theft Protection Review

Final Thoughts

You know that having an emergency fund is better than not having one. Start small and build it up over time. Your’e not saving an emergency fund expecting an emergency to occur but, life is not fair. There is bound to be an emergency come up at some point.

You are better off being somewhat prepared for it than not at all. Don’t leave yourself open for a complete disaster from a small emergency.

When you have a set back don’t beat yourself up. Just learn any lesson you can from it and move on. Try your best to move in the direction you want to go.

Don’t forget the power of starting a part-time business!

16 thoughts on “How To Save an Emergency Fund”

  1. This pandemic is a very good example of the reason why we should have an emergency fund and to be honest I have learnt about it the very saddest of ways ever. I have to say that I am very pained to not have enough to live the way i want right now but I am happy that we could get something from the government and I got something from a give away online too.

    Reply
  2. I have always believed in an emergency fund and if a person puts some aside each week this will help.

    I really enjoy how you offer a way for people to make passive income online and wonder if I work really hard on my business online, how long will it take until I see money. 3 months 6 months, 1 year?

    I know it takes time to build a great business and I guess it’s not too different building online except for me the best part would be low overheads which is something I feel a lot more people will be thinking about with what is happening throughout the world

    thank you for sharing this. I might go check out your recommendation

    Reply
  3. Hi! This has been a very useful post. And you have nailed it concerning me. Most of the time I’m relaxed but recently I have begun to worry about not having an emergency fund. With all this that is happening to us concerning this virus, I have realized that economical circumstances can change with the snap of a finger, and we should always be prepared.

    I personally believe we should have up to 8 months of expenses, saved in our emergency fund.

    Reply
  4. Emergency fund are fund saved prior to an unforseen contingency. Life may throw some challenges at you it is your preparedness that determines how well you will come out of it. It is always good to save an emergency fund. There are many means by which one can  save up for emergency,this article already provided it.

    thanks for sharing this with me.

    Reply
  5. hello there!

    the review is pretty awesome, the COVID-19 pandemic is a good and a live example of why many people should do savings. economic status can change any minute, so we should always be prepared.

    As you said, saving may become very hard as you are thinking that you should have 4-8 months’ expenses the key is to “start somewhere”.

    I have definitely liked the 10 tips that you gave out on how to save your money fast.

    thanks for sharing

    Stephen…

    Reply
  6. Luv your post. For many years we struggled living paycheck to paycheck. We heard a money wizard, Dave Ramsey, who emphasized so much that everyone needs an emergency fund. Eventually we got there. This year we had to dip into that fund, and were so glad it was there. Six month’s income is what has been recommended to us. After having some big expenses come our way this year, we need to build that emergency fund back up. It is splendid advise to follow.

    I always felt that if you saved a certain percentage and put it into a savings account before you put it in your pocket, you never missed it and your savings account would grow.

    All the best.

    Reply
  7. Thanks for your article on how to save an emergency fund Russ. You offer very valuable pointers of what it should and shouldn’t entail as well as the importance of keeping the amounts realistic. One of the hardest things I ever had to learn was how to save any sort of fund. However, the most important step one can ever take is to start with whatever amount they can spare and with time, the habit becomes easier. I’m not where I ought to be but I’m way better off than I was five years ago.

    We can never adequately prepare for the worst case scenario but this article will help many understand the importance of saving an emergency fund.

    We are Blessed.

    Mark

    Reply
  8. Most of us do not have emergency funds. We will feel the stress when something unforeseen happens and funds are needed.

    Take the current Covid-19 pandemic as an example. There are many people who lost their jobs or income and do not have emergency funds to tie them through.

    You have pointed out we need 4 to 6 months of emergency funds. To me, the more the better.

    I am happy to know that you have provided tips on these topics which is very helpful.

    10 Tips to Save Money Fast

    Multiple Streams of Internet Income

    Earn Passive Income with Affiliate Marketing

    Thank you for sharing. Marc.

    Reply
  9. I started diversifying my savings ever since I got my first paycheck. I was told anywhere is better than putting money in the checking account where the return is often the lowest. Well, I’m glad I did because not long ago, there was a family emergency and I had to dig into some extra funds to make sure we have the medical bills covered. With the economy going downwards and no clear direction on how things are going to be subsidized, we should all take this as a strong lesson to start an emergency saving, if we haven’t done so already. 

    Reply

Leave a Comment