We've previously mentioned the exciting and different way of looking at emergency funds.
Building the habit is great and we'd love to help you get more hands on and practical with building an emergency fund.
First of all it's important to understand the importance of budgeting.
To get clear on what an emergency fund is great for, your goals will help to give you insight and drive to achieve.
Now that we've understood some of the crucial pre-steps in establishing your emergency one point to consider is:
What's the point of having an emergency fund / financial buffer
Financial buffers are one of the key foundations that can enable you to reach your finance and personal goals. If you'd like more information on what the point of a financial buffer is let us know however let's get into the nuts and bolts of how to build an emergency fund
Steps involved in creating a financial buffer
- Set a number based on x amount of monthly expenses.
If you live on $400 a month, let us know your secrets to begin with however define what that actually includes. This can include rent, groceries, school fees, transportation and even a basic amount of entertainment
- Create space in your spending plan to allocate to your emergency fund.
Once you decide how much you require, take a look at your spending plan aka budget and see how you can allocate funds to create the financial buffer
- Evaluate at the end of each month how you have gone with creating the buffe
Rome was not built in a day and it's likely your emergency fund will be no exception. Evaluate how you have gone, where you could do better and importantly what you'll do to get better
- Hit your financial buffer target
Being a reader of Money Glee you'll be a high achiever and once you set the wheels in motion, it's likely that there's not a lot that will stop you!
Review on a quarterly basis
Life situations will change and sitting down to go through a review on a quarterly basis means you can adjust and or increase you financial buffer.
Keep the momentum going
Once you've got your emergency fund running like a well-oiled machine, keep the habit going. A great option you could take is to re-allocate your emergency fund allocation to help grow your wealth.
Speak with an advisor who can help you grow your wealth
Now you've discovered the discipline and habit behind creating an emergency fund, it's time to speak with someone who can assist you accelerate the process to achieving your Money Glee! Make sure that they are actually successful with their money and clear on what they want to achieve themselves
What have you done to create an emergency fund?
What has stopped you in the past from doing so?
Let us know which topics you'd like information on & remember to share the love by sharing the content and writing a comment
Oh as always remember to live your Money Glee!