Emergencies happen all the time. You can never predict when they might strike, but it’s good to be prepared for the worst-case scenario. An emergency fund is a way to help you avoid feeling stressed and out of options in an emergency situation–whether that’s due to a sudden job loss or your car breaking down! This blog post will walk you through what an emergency fund is, why you need one, and how to get started building yours today.
What is an emergency fund?
A lump sum of money you can access quickly in an emergency situation.
Why you need one?
No matter how careful we are, emergencies happen all the time. It’s a good idea to have between $1000-2000 set aside for these types of situations so that you don’t end up feeling stressed and out of options when they arise.
An emergency fund is not an investment, it’s insurance.
How to get started?
- The best way is to start saving a little bit each month and put it in your bank account. You don’t need much–even $25 per paycheck can go a long way! It helps if you set up an automatic transfer so that the money goes straight from your checking account into savings without you even noticing or thinking about it. If you feel like this strategy might not work for you, try putting aside some of the money that would otherwise be spent on happy hour drinks, expensive dinners out, or impulse purchases online every day until you’ve reached the goal amount. This will help curb unnecessary spending habits while still providing protection against emergencies.
2. Sell things on Offer Up, Facebook marketplace, or eBay! You can get a lot of money by selling things you don’t use anymore.
3. Start a side business: If you have a talent, or know someone who does, offer to do some work in your free time. For example, Dog walking, Tutoring, House sitting. I’ve seen people in Facebook Groups offer services.
4. Sell clothes on Poshmark: There are lots of ways to monetize your closet! You can sell things through consignment stores or make some money by selling them online.
5. Meal Plan: Planning your weekly meals before going grocery shopping saves money by not having to over-spend and also makes for more compelling lunches, too! Check the ads for deals on meats and produce, then make a list of meals that are filling but don’t require too many ingredients–you’ll save time and money.
It’s ok to use the word “no”, sometimes we have to get accustomed to using that word more often.
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