64% of millennials said that starting an Emergency Fund was their top financial goal for 2016. (Source)
When you have an Emergency Fund set up with 3-6 months worth of expenses in it, life is less stressful. Having that safety net means you don't need to worry about a vehicle emergency, job loss or other financial problems. You've got it taken care of and are free from the pressure and stress of the unknown.
How do you start?
Some experts recommend setting up a Money Market Account for this. They will earn some interest and usually give you check writing options. Having the funds in a separate account will make it harder for you to accidentally spend it.
Once you have the account set up, set a goal and determine the amount that you will put in every pay period. This will vary for each person, depending on the situation. Experts recommend having 3-6 months worth of expenses set aside. The faster you can get it saved up, the better.
What if you struggle finding money to set aside?
It's always hard to find extra money to set aside. If you can, pay yourself first. As soon as the pay check comes in, put an amount in the Emergency Fund.
If you really have nothing to spare, it's either make more money or cut an expense.
Here are a few ways to make extra moolah:
- Pick up more hours at work
- Look into odd jobs: dog walking, baby-sitting, farm chores, cleaning, etc.
- Sell some stuff: clothes you never wear, extra toys/household items, etc. at garage sales or online buy/sell sites
- Have a hobby? Make it pay! Photography, woodworking, crafts, garden produce, flower bouquets, etc.
- Quit TV (or call and see if loosing a few channels could cut your bill)
- Cook at home more, it's cheaper than eating out
- Call your phone provider and see if they'll give you a better deal
- If you have a membership that you never use, cancel it
- Get movies/magazines/books from the library for free instead of going to the theater, renting, buying and subscribing
Do you have other ideas? Share them in the comments!
Peoples State Bank, Member FDIC