5 essentials tips of starting an emergency fund

Do you know what to do in an emergency? Here are some financial tips to prepare yourself.

10:31 06 January 2014

When times are tough and you have nowhere to turn, an emergency fund might just be the thing to save your bacon. If saving was an afterthought to you, then you are probably in big trouble.

However, when you are put in a situation where your finances are in a mess and no money is coming in, you have to have a crutch to lean on. If you have no savings and have no members or benefactors to see you through, those might be one of the most trying times you will have to endure.

1.    Take the first step and start saving

You should stock a separate savings account at regular intervals. The beauty about emergency funds is that every little bit helps and you should not be discouraged if you have something very little to put into it. Make sure that you do notwithstanding the amount.

2.    Face reality

Reality has teeth and when it is ignored it bites. Understand that emergencies might crop up when you least expect them to. You have to be very strategic about how you handle them.

3.    Regularity is important

In order to bolster your finances, you should make regular deposits in the account. Have a standing order that cuts some part of your wages or salary and puts it into a saving account.

4.    Emergency only!

The keyword is “emergency” and you should only touch the finances in there in case of emergency only.

5.    Increase the Amount you Set Aside

If you are capable of increasing your contribution do it. If you have something to spare, always deposit it into your emergency kitty. Your finances will thank you later.

Life will at one time or another put in situations where we have to depend on our wits to survive. That is the only way you can live to tell the tale. At least that is how human nature has been crafted over the years.