6 Ways to Put More to Your Emergency Fund
We all know that life is totally unpredictable and anything can happen. Most of us try to plan ahead and foresee their future needs and expenses, but still there are things which happen suddenly and there’ s nothing you can do about it. You never know if you will need money for an urgent car repair, you may lose your phone or get a bill which has to be paid urgently. Financial experts insist that every person who wants to create personal financial well-being should have an emergency fund. However, it’ s important to understand the difference between an emergency fund and rainy day savings. Feeling curious?
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Rainy Day vs. Emergency
Most financial experts say that rainy day savings is the money which can help you to fix unexpected problem or to help you to stay afloat within a few days. In other words, this money can’ t provide you during a long term. Emergency fund is intended to help you to make ends meet in case of a serious life change. According to a perfect scenario, emergency savings should be enough for you to cover all your living expenses within 3-4 months. But for sure – the more money you have, the more confident and protected you feel yourself.
Start Keeping a Track of Expenses
To build an emergency fund it’ s necessary to understand one thing: the less money you spend the more you can add to your savings. That’ s why it’ s time to start counting your money. Write down all the purchases you make within a month, so in the end of it you’ ll be able to analyze your spending. It allows you to understand how much you spend on your wants and on your needs and which expenses you can easily avoid.