A few weeks ago, a friend and I were discussing matters around finances and she asked if had an emergency fund. I’m quite familiar with emergencies, but it hadn’t dawned on me to actually have an emergency fund. Not a savings account, but a separate account for emergencies. Emergencies can be subjective, buying those shoes that finally went on sale could be an emergency to some while repairing a broken taillights could warrant an emergency to another. With two of my friends getting married this year and one wedding taking me to Nigeria, I’m inspired to kick my savings plan in high gear. Here’s what works for me.
1) If you can, stash away from your savings to build an ER fund. Or:
2) keep your ER fund easily accessible. I’m thinking bank account with atm card for easy access.
3) Pay yourself. decide whether you’re going to put aside 25, 50 or a 100$ after your calculated expenses. Start small and increase gradually as needed.
4) Keep track of what you spend your money on. I can’t tell you how many times I’ve blown a significant amount of money without an account for it. By keeping track of your purchases, you can assess where you’re spending more money leisurely and make necessary changes.
5) Eliminate the urge to visit Starbucks or Caribou everyday or eating out for lunch everyday. Example: I’m not too big on tea, so I make Ovaltine at work instead of
the occasional morning run at the coffee shop.
6) Treat yourself! just because you’re building an emergency fund doesn’t mean you can’t enjoy the occasional sushi dates. Treat yourself to a weekly Caramel macchiato or whatever tickles your fancy.
Be realistic, set personal goals and train yourself to wean off bad spending habits.
Now that I’ve shared what works for me, I’d love to know if you have an ER fund or fun saving tips that works for you..
thanks for reading..
Jewel