6 WAYS TO BUILD YOUR EMERGENCY FUND
These expenses include medical bills, car repairs, and losing your job
By Ashley Chorpenning
An emergency fund is an account designed to cover large, unexpected expenses. These expenses can include medical bills, car repairs, or costs associated with losing your job. If you need to boost the funds you set aside for emergency instances, here are a few ways to build your account.
ESTABLISH AN AUTOMATIC CONTRIBUTION
Set up an automatic contribution to your account. This will help you get in the habit of saving. You can start with a small contribution amount and increase it over time, helping you boost your financial confidence.
CONTRIBUTE YOUR SPARE CHANGE
Using apps like Qapital, Acorns and Digit will help you round up your purchases to the nearest dollar and save your change.
CUT YOUR EXPENSES
Get creative and find ways to minimize your expenses. From negotiating a lower cable bill to eliminating your Spotify subscription, there are plenty of ways to cut back on your spending. The less you spend, the more money you will have to contribute toward your emergency savings.
SAVE YOUR ENTIRE TAX REFUND
If you anticipate a tax refund, put the entire amount in your emergency fund.
START A SIDE-HUSTLE
No matter what talent or skill you possess, there’s a way to make extra cash doing it. From handyman repairs to offering music lessons, make extra money doing the things you enjoy.
TRY THE 24-HOUR RULE
Before you make any purchase, think on it for at least 24 hours. The longer you ponder your purchasing decision, the longer you have to change your mind. Forgoing impulse purchasing will help you put more cash toward your emergency fund.
Having an emergency fund consisting of funds to cover up to six months of your expenses can help you minimize financial distress in a crisis. Using the tips above will help boost your rainy-day fund in no time.