Posts Tagged ‘emergency savings strategies’

3 Proven Strategies To Build Emergency Fund

Everyone knows that it is important to build emergency fund and maintain it, but very few successfully do it. The reason is that they follow wrong strategies. As a result, they often end up building this assumption that the process is quite painful. It is very important to understand that when you follow the right strategies, you can actually automate the entire process of saving for emergencies and eliminate all the pain that you may otherwise have to face. All you need is the right approach. Try these three proven strategies and you will see how effortlessly you can achieve your financial goals.

Automatic Deduction From Your Monthly Paychecks

Most banks allow you to set up an arrangement, as per which as soon as your monthly paycheck is deposited, a certain amount of money is automatically deducted from that and deposited into your savings account. When the process becomes automated, it will make things very easy for you. You will not have to do anything manually; thus, you can easily eliminate the pain from the process. You can make things much easier by setting up a similar arrangement for your regular monthly bills also. This way, you can easily pay off all your bills in a timely manner and still build emergency fund without even touching the money or doing anything manually. This is also a great strategy to avoid late fees on your bills, which is just another form of savings.

Keep Paying (This Time To Yourself) Even After All Your Debts Are Paid Off

While you are paying off your debts, you have to deal with tight finances, but you soon learn to live with that. Now that it has become your habit and you have found out your ways to live smoothly even while a certain amount of money is being eaten off by a big car loan or other loans, a great strategy is to continue making those payments (or a little less), this time to your savings account, even after you have got rid of your debts. The idea is not to spend this money on useless stuff. You can continue with the old tight budgeting plan and build emergency fund at a faster pace. The best thing about this strategy is that it will prevent you from getting into further debt problems.

Avoid Impulse Buying – Implement 30-Days Wait Period For Big Purchases And 24-Hour Wait Period For Small Purchases

Impulse buying is one of the most dangerous factors that can ruin all your budgeting plans. Therefore, you must do everything possible to avoid impulse buying. If it is a small purchase, wait for at least twenty-four hours. This waiting period is important, as you will get enough time to make an informed decision whether that purchase is necessary or can be postponed or cancelled. Likewise, if it is a big purchase that requires a big sum of money, you should wait at least 30 days. Purchasing a particular item may sound like a good idea at the moment, but you are likely not to feel the same way the next morning or the next month. When you implement this strategy thoroughly, you can save a fortune for yourself, which you otherwise could have just wasted.

Overall, when you follow the above three strategies thoroughly, you can easily build emergency fund without the risk of failure.

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