5 Tips to Build an Emergency Fund Today

You may have been affected negatively by this coronavirus pandemic outbreak, and your worries are how to come up with an emergency fund. You may be looking to get out of debt on your own or you may have recently been laid off due to coronavirus. Such a financial crisis is erratic and unforeseen.

Unluckily, the pandemic impact has hit many financially. The primary goal for this article is to guide you on the way you form an emergency fund to help with a situation like the current one.  Keeping savings, however little they may appear to you is very important. 

During your budget planning, you should set aside money meant for any kind of emergency.  You wake up on a bad day and lose your job, or you might need to fulfill your desires by buying a new home, etc., those are financial burdens, and they are different depending on the need. With an emergency fund, you can solve these needs with little pain. 

Side hustle 

If you are capable of running a small business or not getting employed permanently alongside your main job, then that’s called a side hustle. Here you get some little money alongside your salary, and they can boost you. You can choose to cater to your responsibilities with side hustle earnings and then save a significant portion of your salary.

You can drive these savings towards emergency fund savings, which you relieve while in a crisis. Besides hustling giving your extra money, they equip you with skills in other fields and make it easy for you to survive, because when you’re skilled in many fields, it is hard for you to go without food on the table. 

Budgeting  

This can be such an excellent tool to support you in your savings plans. When you analyze income and expenditures too, you stand a better chance of starting and maintaining a very good emergency fund. Zero-based budgeting can be used to reduce your expenditures and therefore drive the money towards the emergency fund.

If you may be interested in a Google sheet budget, many of them are excellent and free for you to consider what suits your objectives.

Debt Pay Off Planning 

A debt payoff planner allows you to utilize the debt payoff method. The debt payoff method is very important in debt repayment as it helps you offset your loan faster and easier.  However, you can be curious about how prioritizing on repaying your loan helps you on your emergency funds saving plan. 

You need to understand that when you can tell the installments you are paying towards servicing a loan, you know what amount to set aside for your emergency fund savings plan.  Most debt payoff plans, like avalanches, snowballs, and savvy, will be able to help analyze. 

For debt payoff planners, you can browse the internet for a free template or other debt payoff planner that is more automated and will help you understand how much to pay for individual loans for busy individuals who cannot take and analyze on their own. So helpful indeed. 

Save for a Big Event

With savings, you can plan on how to spend it. If you’re fond of saving, then the spirit should continue, and if you have never thought of beginning a savings plan, you better do it now. You can use your savings on advancing your education; let’s say going for your masters or Ph.D., you can also use your savings on to have that dream wedding you planned for in many years.  To save for a big event, you have to involve insurance to cover such events because many have failed.

For instance, saving for a honeymoon or holiday trip to your favorite place, then trip never happens, or does not make you happy, you end up not feeling the value of your savings, you can ask for compensation. 

It is good to cover your resources and also time spent in preparation for such significant events. You should achieve the goal of the event and enjoy the value of your money. Personal financial knowledge will save you from stress emanating from misuse of savings or failed big events. 

Medical Expenses 

An emergency medical bill can get you worried if you lack emergency fund savings, which could have otherwise covered it.  In addition to insurance cover, you should save for your family medical bills because insurance policies cover not all expenses coming from these medical bills. 

Even if you maintain a healthy diet and workout unreservedly, you’re not free from illness and fates.  Recently a study has shown that in excess of 25 % of most families experience financial burden, which is a result of medical care, and most of the families are the ones who’s working force has the least income.

A Harvard research study showed that financial medical expenses give rise to 62% of personal bankruptcies such as a Chapter 7 means test to estimate Chapter 7 qualification or a Chapter 13 payment calculator to estimate Chapter 13 plan payment due to medical hardship. 

Couples need to choose a good medical cover that that their health needs are well covered.