How unpredictable life can be is something we are all aware of. At any moment, unexpected events can spring up, and even when we plan for future needs and expenses, life can sometimes just throw us a curveball. That’s why an emergency fund is so essential.
Here are six ways you can sock away more money into your emergency fund:
1. Prepare for Changes in Your Lifestyle
Think about your spending and find the places where you can cut costs. Interrogate yourself and your expenses with some basic questions: Is it really necessary to have cable TV? Can I somewhat reduce the amount of dining out I do with friends? Can I live without my daily Starbucks? Look hard at your regular expenses and have some tough conversations with service providers to see what can be saved. Even small changes can lead to big savings that add up over time.
2. Pick the Best Location for Your Savings
Selecting a secure storage location for your emergency fund is critical. Do not keep cash at home where it might be too easy to access for non-emergency purposes. A better option is to stow your savings in a high-interest savings account at a bank. Your money will be “safe, sound, and liquid,” earning interest without being too accessible for impulse spending.
3. Increase Your Income
Having an emergency fund gives you financial independence. If an unexpected expense crops up, you can tap into your own savings rather than leaning on loans and credit to cover the shortfall. When saving, look for ways to earn more—consider picking up a part-time job or a side gig online that puts your skills to use. Plenty of online platforms offer flexible jobs that can boost your income without tying you down to a traditional office or a workweek with set hours.
4. Modify Your Thought Process
If you’ve taken a backseat with your money, it’s time to change your mind. Reflect on whether that approach has helped you achieve any financial goals. Try on this way of thinking: You’re not a spending automatron, but you’re not a confirmed tightwad, either. You’re the sort of person who calculates just how much room there is in your budget for a splurge and then makes a little room because you like living well, not just saving well.
5. Benefit from Free Apps
Several apps are available on the internet for free that can assist you in saving money. Use services like Google Voice, FaceTime, or Skype to make calls without racking up your phone bill. Text using free apps like HeyWire or iMessage. Just be aware that the person you’re trying to reach might also need to download the same free app that you already have in order to keep your conversation charge-free. Finally, don’t overlook the potential benefits of using free personal finance apps to keep your budget and your savings on track.
6. Use Paid Advertising Cautiously
When you use free applications or games, you should be cautious about the advertisements that you might encounter. Even if the ads look safe, clicking on them can lead to some pretty unpleasant surprises. You could click an ad and find yourself being charged for something you didn’t want to buy. To prevent that from happening, make sure that any applications you use can’t make purchases without your permission. And if you’ve got kids using your devices, make sure the kid-friendly apps they might use also can’t run up unexpected bills.
These strategies can help you boost your emergency fund and prepare for the unexpected.
