Setting up that fund would be difficult without help from others who were successful on their own. There are four easy steps that you can follow to set up that needed emergency fund.
1. Review your monthly expenses. Remember that even during emergencies, there are family expenses that should not be disrupted such as food, utilities, housing and the kids’ schooling. Track your three-month expenses so you know how to handle them in the next few months of establishing the emergency fund. Make adjustments to make room for some extra cash. Some of the expenses you can go without are gym memberships or cable subscriptions.
2. Open a bank account for the fund. A separate account for the emergency fund will prevent you from using it for other purposes. The bank account will also help you assess your progress in setting up the fund. The bank also keeps you focused, knowing that something tangible is in the custody of a third party.
3. Start saving some amount for the fund. You can make the savings automatic. Talk to your employer about auto-deducting that portion allotted to the emergency fund and have it credited to your bank account.
4. Monitor the growth of your emergency fund. Since the setting aside of some amount is recurring, it won’t take long for you to realize that the emergency is growing at a regular rate.
These are easy steps to take. If you try them, you will make setting up the emergency fund workable and attainable. At least, a little sacrifice today can provide you some peace of mind for future emergencies.