It is never too late to start your emergency fund. When emergencies occur, and you need to have sufficient funds to cover for the expenses that come your way, having some kind of a safety net should come in handy. This is why it is important that you prioritize building your emergency fund as soon as possible. By doing so, you can eliminate the need to take out a instant personal loan or flexible payday loan when surprises in life hits you hard. You will be able to cover these expenses without any problem at all.
But at the same time, not all people are exactly too keen about saving for a rainy day. There is the tendency to spend more than what they earn, which can be quite detrimental to anyone’s financial health. Yet, some individuals do it anyway even if they are experiencing issues with money. During payday, they end up making big purchases, eat out too often, and go on shopping sprees that can be rather tempting to do so when their paycheck comes. The truth is, not everyone saves up money for the purpose of spending their funds on unpleasant situations. These circumstances that may come in your life include a medical expense, sudden unemployment, and a car repair requiring immediate attention. Although no one is particular about spending their savings for these reasons, there is a great need to be prepared for such conditions that are inevitable in anyone’s life. Having some cushion when these situations come your way can minimise your stress level while allowing you to get back on your feet the soonest possible.
Having some liquid cash saved in the bank can give you the assurance that your life will continue to move along as normal no matter what type of disaster comes your way. This is the reason why preparing yourself well for such surprises is practical to consider early on – even things seem to be going smoothly in your life as of the moment. After all, these money problems can make a serious impact on your emotional, physical, mental, and psychological health. So, having an emergency fund is indeed a must for every person.
Unfortunately, even with the understanding that emergency savings mean so much in everyone’s life, Singaporeans have a difficult time saving enough. The Singapore Business Review released a study stating Singaporeans between the ages of 20 and 35 years of age are close to financial disaster in terms of the amount of savings they have in the bank.
With this in mind, we are here to offer you some tips on how to start building your emergency fund. It is better to start as early as now, considering how very essential to do so whether you have just began joining the workforce, or you have been employed for quite a while now.
1. Realise the value of saving
The very first step to saving for your emergency expenses is by realising its importance. There has to be a strong motivation to do so, otherwise it would be easy to be swayed and do something differently. There is a great need to have mental discipline to be able to save up as much as you can, so you need to understand fully why you should set up your emergency fund to really make it happen.
Start by setting a realistic goal and slowly work towards attaining it. This target varies from one individual to the next, so you should make sure the objectives you set is parallel to your lifestyle. But for the most part, the ideal amount of money you need to save is worth at least 6 to 9 months of your salary. This amount should suffice in case you suddenly lose your job. By keeping track of how much you have saved per month and maintaining the goal in mind, accumulating the amount of cash you need should not be too difficult to achieve.
2. Set up an account specifically for your emergency expenses
It can get confusing to combine your emergency savings with your life savings of other types of account. This is why you should think about setting up a separate account that is solely for your emergency funds. Doing so will also enable you to keep track of what you have saved so far, then determine if it is enough or still insufficient. An ATM card for your emergency fund is a practical idea since this will allow you to withdraw easily when the need arises. But be sure to leae the card at home instead of carrying it with you anywhere you go. This will prevent you from giving in to the temptation to take some cash out unnecessarily, particularly when you have the urge to buy a random item that is of no use or value to you at all.
The goal is to have your emergency funds set up, yet without touching it unless it is a serious situation requiring some cash for you to get through it. Also, it would be nice to track you money since you will feel more motivated to continue saving once you have realised that you are starting to inch closely toward your goal. You will be amazed to realise that the more money you make, the quicker the pace you take to help you reach the targeted amount.
3. Get your money auto-credited to your emergency savings
During payday, people get into that strong urge to spend as a reward they want to give themselves for a job well done. While there is absolutely nothing wrong about treating yourself to something great when your paycheck comes, it is important to have discipline when spending your money. You may buy things you need such as your basic necessities, but splurging on something that is completely irremevant in your life is not the best way to help you grow your emergency funds. This makes it so important for you to consider crediting your salary to your emergency savings every month instead of simply holding on to your salary.
Another thing that can help you stay on top of your emergency fund is by having a budget-tracking app in your mobile device or PC. This app will enable you to keep track of your expenses and where your money goes since there are situatios when you are not even aware of what you are spending on.
By monitoring your monthly expenses, you can find out how much exactly you are saving, along with the amount that you still need to add to it.
4. Make it a fun challenge
If the whole idea of saving for the rainy day is still not very much appealing to you, then it is time to make it a little bit more interesting. Perhaps, you can turn this activity into a game or a challenge with a friend. After all, who is not up for a little challenging game, right?
You probably have a friend who is as committed to saving as you are. This is a great way to keep saving as much as you can, particularly if someone is supporting you along the way. But if you have no friend who is having this strong motivation to save, then you can just challenge yourself, anyway. For instance, you may want to set a specific amount that you want to save in a certain period. Let’s say you want to save $500 at the shortest period of time as possible. Then, keep that goal in mind and work towards achieving it. Soon enough, you may even go past that amount and surprise yourself by making more than what you had in mind.
Saving money may not be the most exciting thing to do for some people. But at the same time, this is a rewarding activity that can spare you from stress linked with unexpected expenses life sometimes throw in our way. By having a good amount of cash saved for these emergencies, you can move on easily no matter how tough your situation may be. Or you can always approach licensed money lender in Singapore for alternatives selection.