Today I am handing my blog over to a friend, a wise, thrifty, money saver of a blogger. The following is all written by Emma.
Hi, I’m Emma and I blog over at EmmaDrew.info, all about saving money and ways to make some extra money. I am a strong believer in having an emergency fund and it has certainly helped us out of a few financial pickles.
Having an emergency fund is really important so that if you were faced with sickness, job loss, a large repair bill or any other unplanned financial emergency, you have the money set aside so that you can maintain your normal lifestyle. Here are some of my tips to help you kickstart your emergency fund.
How much to save
In an ideal world, we would have at least 6 months of our salary set aside as an emergency fund. I don’t know about you, but that figure seems completely out of my grasp. There is no right or wrong amount when it comes to how much you should save, and anything is better than nothing. How much you need in your emergency fund also varies depending on your lifestyle – if you are living at home rent free with very few bills then your emergency fund will be different to someone who has a mortgage, car payments and is supporting a family.
Make a start
Usually the amount we should have saved as an emergency fund paralyses us. Don’t be put off by your final emergency savings goal and just start saving! You can choose to save a set amount every week or month, or perhaps try to make some extra money to use as a lump sum or you could even save the odd pence in your bank account. You need to make it realistic and as easy as possible.
You can easily set up an online savings account wherever you hold your current account – you won’t get a great interest rate, but you will get instant access to your emergency fund.
Make your emergency fund a priority
Saving for a holiday is a lot more fun than saving into your emergency fund, but your emergency fund is really important and should be a priority. Choose to make it a priority for a certain time period or until you reach your savings amount and treat it like a challenge. You can also boost your savings by selling your unwanted items on eBay, completing online surveys and so much more.
Debt vs an emergency fund
If you have any outstanding debts and you are paying interest on them then you may want to consider paying off your debts instead of having an emergency fund. I didn’t feel comfortable having no emergency fund at all, so when I was still paying off my debts, my emergency fund was just £200.
Do you have an emergency fund, or any tips for saving into your emergency fund? I would love to hear them.