Something to fall back to or a backup is not strange to many of us when we talk about finances. In order words it is refered to as emergency fund.
Emergency fund is not our normal savings and it is not money kept to settle regular bills, but a money set aside for a day of dire need.
Creating and building up an emergency fund is one of the most important things you can do to help your financial health.
For most people building up an emergency fund is an “easy said than done deal” and it wouldn’t be also surprising to find out that such people don’t even have a saving culture let alone think of putting an emergency savings together.
You however most act fast to salvage your financial health through emergency fund following some step by step approach.
Start little by little and believe you can keep money aside in case of emergency. No amount is too small for keeps. If you find it too difficult to do you can start by keeping aside an amount you count as “insignificant” and not attractive for you to spend.
Avoid living extravagantly so that you can put that excess money into your emergency fund as a caution for changing times. Although nobody pray for hard times to come but it is good to be financially alert always.
Avoid getting into debt at all cost as debt have a way of sinking one in a mire of financial trouble even when one tries to be free of it as it will keep on going in a circle of using debt to settle debt and stop your chances of building an emergency fund.
Stop the habit of spending your income upfront or budgeting on an income that is not yet in your hand. Be patient enough to wait for pay day and draw out your budget from your net income putting some money aside for your emergency fund.
Stop Postponing date for paying your bills as it will plunge you into debt and defeat your goal of investing in an emergency fund.
You can automate your emergency fund by placing an order on your bank to immediately deduct a certain amount each month from your pay check into your emergency fund account. Make it a point of duty every month and consider it sacred just like your tithe, treating it as a money that is not yours.
Then you can reward yourself when you have achieve the goal of setting up an emergency fund and overcoming the “spend it all” habit that have so enslaved you for such a long time by giving yourself a treat and getting that thing that you so much cherish for yourself as an incentive for fortifying your emergency fund.
Hope Ikwe
