My money saving advice for you is to learn the importance of having an emergency fund. You may not realize the significance of having this extra money until it is too late.
You can try to plan your life all the way from the major decisions down to the little details, but keep in mind that things don’t always go as planned. That’s where the importance of an emergency fund comes into play. Things in life can go awry and unexpected costs will come up. It’s at these crucial times that an emergency fund can save the day and the lack of an emergency fund can be a disaster.
It can be a terrifying feeling when an emergency happens and you aren’t financially prepared. Anything from an unexpected medical expense to an expensive car repair or an out of the blue loss of income, not having an emergency fund can throw your whole life off balance. You end up taking money from other places, paying bills late and falling into debt quickly because there is no other place to take the money from. I guess that’s where the expression “robbing Peter to pay Paul” came from. Before an emergency situation happens, take control of your finances and build your emergency fund.
My money saving advice tip would be to add an emergency fund to your monthly budget if you have not already done so. Your goal is to save enough to be able to cover your monthly expenses for at least a few months. Decide on an amount to add to your emergency fund after each paycheck and stick to it. If you feel like you can’t save enough, go over your budget and see what can be cut a little bit.
Most people will find several things they can cut back on to maximize the amount designated to the emergency fund. My advice is always to look at what you spend every day on food and drinks outside of your home. This is an expense that adds up very fast and can be cut by more than half if you prepare meals and beverages at home for you and your family.
Sometimes, the worst thing about an emergency is when you cannot take care of it. Not having an emergency fund can be a critical mistake. Do not wait until an unexpected expense or emergency happens to figure out how you are going to pay for it. Start building your emergency fund now to give yourself some financial stability and when a financial emergency does happen you will feel confident that you can handle it.
Ways to save:
Do you have any money saving advice or why you feel an emergency fund is important, please share in the comments below.