Establishing an Emergency Savings Fund
Even if you try to “live in the now” it is still vital to prepare for tomorrow by establishing an emergency savings fund. Job loss, medical expenses and car repairs can leave you panic struck if you have not saved enough to cover those unexpected expenses. It is never too late to start building an emergency savings fund.
The ultimate goal is to have enough money put aside to supplement at least 6 months worth of salary. That number should not intimidate you, but motivate you to have a long-term goal. As a beginner establishing an emergency savings fund there are some immediate steps to take to start making the process earlier.
Depending on where you live, you need to be 18-21 to open up your own savings account. First thing to do is locate a savings account with some type of promotional incentive. Many banks offer cash bonus, higher interest rates or even matching funds to those opening their first savings account. Make sure to comparative shop for the best options for your scenario, set up the account then do not touch it. Your policy should be hands off to help build your emergency savings.
After that portion of your emergency savings fund is established, the next step is to contribute to the savings account. Baby steps are a fine way to begin and setting up a direct deposit of $10-$25 dollars a paycheck can really add up over time. Another way to sneak money into your emergency savings fund is to take your tax refund and split it so half is for savings and half is for splurging. Another trick: get an old fashioned piggy bank. Every bit of small change that ends up in your pocket should go in there. When the piggy is full, deposit the funds in your savings account. That small change is certainly not money you will miss.
By committing yourself to establishing an emergency savings account you can make it happen. Even $1,000 can provide you with a nice cushion if things go financial array. The process can be relatively painless and the peace of mind you can provide your self is beyond monetary value.
