How to Build a Family Emergency Fund

The thing about life is that everything happens unexpectedly. Accidents can happen at any given moment, and with that said, you need to be prepared for the worst. In that kind of event, how will you and your family respond?

Preparation is Key

Avoid the hassle and the panic when you establish an emergency fund that can help you out in case of a financial emergency. It can be used for unexpected hospital bills, emergency car repairs that need to be made, or it can even be used to get you through a few weeks in case you are suddenly laid off from your job. There is no end to how these funds can help you and your family. And if you have decided that it’s time you had one at home, here’s how you can go about starting it:

Start Small

The most important thing you must remember about saving is to start small and form a habit out of it. That means saving a few dollars whenever you can and remember to do it regularly. It could be five dollars every week, or a dollar every week, it doesn’t matter. Those small amounts will eventually add up. If you keep at it, by the end of the year, you will be surprised by the amount of money you have saved.

Open a Bank Account

If you’re not a fan of the piggy bank method, another way you could go about this is to create a savings account in the bank and have your primary account make regular deposits for it. This method is efficient because you never have to think about the money going into your savings account. It will continue to grow without much assistance from you, and it will be ready whenever you may need it.

Good for at least 3-6 Months

Ideally, a good emergency fund should be good to last you for at least 3 to 6 months. For some, it may take a while for this to happen, and for others, it may seem like no time at all.

At first, it may seem a little daunting when you think about saving your money especially if you have other expenses to keep track of; that is why it is recommended to not think about this goal. Just save how much you can whenever you can, and everything else will soon follow. Your savings now may just keep you afloat for a few weeks, but if you play your cards right, it can grow much more in the coming weeks and months.

How to Help Increase Your Savings:

Having trouble committing to your savings? Here are a few things you can do to free up some of your expenditures and give you some spare change:

  • Track Your Spending. Ensure that you are spending within your means and not going over your daily budget. That’s the best way to ensure that you have enough money left over from the day to put in your piggy bank or savings.
  • Save your spare change. Make it a habit of paying for small items in cash, and save the spare change. Use it to make sure that you have some money to put in your piggy bank.
  • Avoid impulse purchases. Impulse buys will put you faster in the red than Carrie on prom night. With that said, if you see something you like and you want to buy it. Wait for a while before you give in to the impulse. This ensures that you have thoroughly thought about the item and how it will benefit you in the long run.

Just keep these tips in mind, and you should be able to keep your savings in line for a long time.

Finally, once you’ve accumulated your savings, remember only to use it when necessary. Build it up for your family to avoid any financial difficulties that may come along the way. We would like to give a shout out to Alpha Car Finance for putting this post together for the benefit of our readers.

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