Budgeting, Investing, Money Mindset
Beginners Guide to Starting an Emergency Fund
What is an Emergency Fund?
An emergency fund is a large amount of money set aside, in case of unexpected expenses such as:
- A busted pipe
- A car repair
- The water heater died
- Medical Expenses
Why is an Emergency Fund Important?
- Having an emergency fund create a buffer for when unexpected expenses come up. This is especially important if you are trying to pay off debt. This way if an emergency comes up, you don’t break the consistency and progress you are making on paying off your debt by relying on credit cards(more debt)to bail you out.
How to get started creating an Emergency Fund
- The general rule is $1000, however, you can start lower ($500) or higher($2000) based on your circumstances. What do your emergencies usually look like? For me personally, it seems something comes up every year that is around $1000, so that is why I chose $1000. What do you need to get started?
- Go over your budget, If you haven’t started I suggest writing out all of your fixed expenses and your variable expenses. I have already created these worksheets for free, in my 7 Secrets to paying off Debt. Click HERE
- Take whatever you plan on saving and transfer it to your savings account weekly or monthly.
Tips for success in creating an Emergency Fund
- Pay all your minimum payments on your credit cards first, then whatever you have left to save, put in the emergency fund.
- Still can’t seem to save? Try pulling out “cash back” where ever you go and start stashing it away for your emergency fund.
- Make it fun! You can purchase my Digital Savings Trackers Bundle HERE. It has 11 different printable worksheets to make saving fun. They are a variety of printable savings trackers from emergency fund, house, car, and even your own savings goals. The fun part is you can color in as you save. Tape is somewhere noticeable, like the refrigerator and color it in as you save. It’s a great visual and motivator.
Frequently Asked Questions
The last thing you need to know about starting an Emergency Fund
- Just start today! Even if it’s $1, at least you have started! Before you know it, you will have 25%, then 50%, then 100% of what you are trying to save. It is the best feeling when you finally meet your goal. In this case, an emergency fund gives you a sense of relief knowing you have a safety net, if something unexpected happens. For me, when I created mine, I felt such a sense of relief and security. I know you will feel that too!
- If you are still working on getting yourself out of debt, please click HERE to get my “7 Secrets to Paying off Debt” for FREE.
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