From job loss to paying taxes, having an emergency fund is a must for your financial plan. It can protect you from incurring further debt and help you tackle unexpected surprise, such as an expensive home repair.
Have you put an emergency fund in place but can’t seem to grow it?
Here are 5 ways to give your emergency fund a much-needed boost:
1. Make it a bill
Instead of waiting to see if you have money to add to your emergency fund every month, make it part of your budget. Treat it like a bill or repayment and make sure you add the same amount to your fund every month. If you have extra, great, but be sure to pay what you’ve budgeted for.
2. Spend less
This might sound simple but it can be a struggle for many. We tend to grow into our earnings and spend any extra money we have. If you can discipline yourself to spend a little less, you can add that money to your emergency fund.
3. Look for other streams of income
If possible, earning a further income (by either working on the weekends or exercising your natural skills outside of work) will ensure you have some extra money to put away.
4. Get competitive
Need some motivation for getting your emergency fund going? Create a competition with a friend or your partner – set a target amount for your respective funds and an end date. Whoever reaches the end date having achieved (or exceeded) the goal is the winner. A little healthy competition can go a long way to motivate you to save where you must.
Remember, an emergency fund is only for emergencies and it should stay topped up if possible. As independent financial advisers with over three decades of experience, we are able to create unique cover and investment portfolios based on your needs.