How to Include the Emergency Savings Fund on a Tight Budget?

How to Include the Emergency Savings Fund on a Tight Budget?
  • Opening Intro -

    You have to consider the different factors in budgeting, such as the number of people in the household, the prices of commodities, the utility bills, and more.

    Hence, you ignore to part with some of your earnings for an emergency savings fund.

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The crashing economy. Employers laying off their employees. The continuous price hike. The growing number of hungry people. Increasing number of people in the poverty line. These are just among the common scenarios that you see everyday. These are just proofs on how difficult it is to earn enough money to sustain the needs of your family.

Because of this, budgeting can become a difficult task. You have to consider the different factors in budgeting, such as the number of people in the household, the prices of commodities, the utility bills, and more. Hence, you ignore to part with some of your earnings for an emergency savings fund. As a consequence, you’re penniless if there’s a need to pay for a major expense. According to the Federal Reserve, 47% of Americans can’t pay for an average cost of $400 of emergency expense without selling anything or without borrowing money.

Why an emergency savings fund is important?

Accidents may happen anytime. It can happen to anyone. It is wrong to have this idea that you’re safe all the time. As a typical human being, you are prone to sickness and death. No one really knows about the possibilities of what can happen tomorrow, not even the richest man in the world knows that. In that case, you need to be prepared for a possible major expense that may come in the future.

3 Things You Need to Know about an Emergency:

How to build up your emergency savings fund?

To some people, setting aside a part of an income for an emergency savings fund is almost impossible. For them, their earnings are just enough, or possibly not enough to suffice all their personal needs and household needs, so for them, emergency savings is out of the budget.

But this is not true. It is still possible for you to save some money to be prepared for the major expense. All you need is a little bit of wisdom and practicality. Here are some of the things that you can do.

Look for an additional source of income.

Set aside at least two hours per day to some simple jobs. The wage that you may receive in these two hours is meant for your emergency savings fund. Let’s say you earn $2 per day by doing this, that’s equivalent to almost $60 per month, or almost $700 per year. This not a huge money but it will help you a great deal when there’s a need to pay for a major expense.

Cut your expenses.

Cut the unnecessary expenses that make your budgeting task difficult. If you have a budget for your vices, you might use it to build your emergency savings fund instead. You might also want to stop your subscription in some products or services that’s eating some of your money every month or every year.

Find cheaper options when purchasing some products or services.

It is a fact that price is a factor to determine the quality of a product or a service. However, there are some expensive products or services in the market, that are just pricey because of the brand. Brand is important because it reflects the trustworthiness of the product, but it doesn’t mean that you can’t find high-quality products from the other brands or even from unknown brands. Sometimes, the price of a product varies in different locations. All you have to do is to canvass on different products in different places, until you find a high-quality product at a lower price.

Setting aside some money for emergency savings fund is not impossible even for people who are on a tight budget. All you need is an intense motivation to save for the major expenses in the future. If you have a strong motivation, nothing is impossible for you.

Being in a tight budget is an opportunity to test your creativity. Make use of this situation to prove your strategic skills. If you find this information helpful, you might want to share it on Facebook. This way, you can help your friends to set aside some budget for emergency savings fund even on a tight budget.

Sources:

30 Ways To Cut Your Monthly Expenses


http://www.getrichslowly.org/blog/2010/02/18/how-to-manage-your-financial-vices/
https://www.entrepreneur.com/article/239960

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