You know you should have some money saved for emergencies, but you’re not quite sure how to achieve that. Maybe you’re already working on a tight budget; perhaps you’ve tried to make saving a priority in the past and failed.
1. Save Money First, Not Last
The first trick to saving is not to wait and see how much you have “left over” at the end of the month, but to “pay yourself first.” At the beginning of the month, or every time you get paid, put a certain amount into your savings account before doing anything else.
2. Set It and Forget It
Take it a step further by automatically saving money to reduce any chance of human error. Set up an automatic transfer from your checking account to your savings at the beginning of each month or every time you get paid.
3. Keep Extra Money
Resist the urge to spend any extra money that comes your way. If you receive a refund check, a stimulus check, or a tax refund, or even $20 in a birthday card from your great aunt Patricia, put it straight into your emergency savings fund.
4. Cut Your Budget
Free up more money to save by trimming down your budget and cutting back on as much as you can. Do you really need to pay for those 700 cable channels? Do you really need to eat out three times a week? Every little bit you can cut from your monthly budget gives you more cash to put into your savings account.
5. Increase Your Deposits
We all know that starting can be the hardest part. Once you establish the habit of saving, look for opportunities to increase your contributions. For example: if you decide to save 10% of your monthly income or $100 a month, consider a small increase. Set aside 12% or $110 instead of the original amount. You’re likely to not feel the difference, and small changes can really add up over time.
6. Let Your Money Grow
Make sure the money you save is working for you by placing it in a high-yield savings account, money market account, or certificate of deposit where it can grow and earn you more money in the future. Every dollar counts, so ensure you’re maximizing your investment returns.
7. Keep Saving After Reaching Your Goal
When you start saving for an emergency savings account, it’s great to have a goal. A common recommendation is to save enough for three to six months of living expenses, but what happens after you reach your goal? At that point, you’re likely accustomed to allocating some of your income to the emergency savings account. And just because you may have met your goal doesn’t mean you should stop saving. There’s no such thing as having too much money saved for emergencies, so keep saving if you can.
Source: https://www.thebalancemoney.com/easy-ways-to-build-emergency-fund-453608
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