Everyone needs an emergency fund, but few Americans actually have one. It’s unfortunate because when an emergency arises few people have any money to fall back on. That’s why it is more important than ever to start an emergency fund and never touch it unless a true emergency arises. A good way to get started, even if you are financially strapped, is to deposit a certain amount of money from each paycheck until you reach your goal. For example, if you want to have a $500 emergency fund and get paid bi-weekly then you could deposit $100 from each paycheck and within 10 weeks you will have your emergency fund. If that is too much of a stretch then deposit what you can. Even having a $100 buffer can be very helpful should an emergency arise so try starting with that and then adding $15 or $20, whatever you can, each week until you have the amount you need in your emergency fund.

Many people find it challenging to get started because they feel like they don’t have any money to add to an emergency fund. There are many ways to cut back and a great way to do so is to make some sacrifices. For example, if you have cable or satellite reduce your plan to basic. That way you save a lot of money and still can enjoy watching TV. Another plan would be to only eat at home. This will save you a great deal of money each week and that is money you can use to add to your emergency fund.

Keep in mind that if you have lots of debt, are behind on your car payment or credit card payments, then you should deal with this debt first before you start saving for an emergency fund. Once you are caught up on your payments then you will be able to start saving for your emergency fund.

These are just a few suggestions to help you get started with an emergency fund. It is really important to focus on getting caught up on your debt and creating an emergency fund so that when emergencies arrive then you are able to afford them and not have the added stress of no money!

Posted in Home Budget

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