Quick Tips For Building An Emergency Fund From Scratch
Having an emergency fund is something we all need to have when disaster strikes. But if this is your first time handling your finances, you might be wondering how to make an emergency fund from scratch.
Well, when it comes to how much money you need to start your fund, you should aim to have at least three to six months’ worth of money. To get to this goal, there are plenty of financial options and steps you can take! Keep reading to learn how you can start building your emergency fund.
How Do You Build An Emergency Fund?
1. Calculate Your Expenses
As we said, an emergency fund should cover you for at least 3 months of expenses. However, your fund can’t do that if you don’t know what your expenses are in the first place.
You need to dedicate some time to figuring out what you spend every month on food, utilities, rent, etc., remembering to account for big annual payments like car or home insurance. Once you’ve got an idea of what you spend, you can start building an emergency fund to match.
2. Start Saving Money Now
It can be hard to start saving if you’re living on a budget, but you should still make efforts to do so. There are many apps out there that will help you do this, rounding up purchase fees and setting aside the difference, or putting a chunk of your income into savings every month.
Use these apps to ensure you’re saving at least something each month if possible. Remember, setting aside a little bit of money is better than nothing at all!
3. Separate Your Money Into Different Accounts
Your emergency fund shouldn’t be in your main bank account, or you’ll find yourself tempted to start spending it. The cash you set aside specifically for emergencies is different from the cash you use even on essential expenses like bills or your rent.
Instead of having all your money go into the same account, separate your emergency money into its account so that you don’t see it and don’t think of using it when you’re out. Avoid taking the card with you if you struggle with temptation.
4. Choose An Interest-Based Account
Getting something back on your savings, even if it’s only a small amount, can be a good incentive for you to save more. If you feel like your savings are earning you more money, you may find you’re more inclined to keep adding to them. This means you need to pick an account that offers some interest on your money if you can and avoid fee-based accounts that will eat into your savings each month.
5. Keep Records
Being strict about good record-keeping can make you more accountable, ensuring you save money whenever you have an opportunity. Log your income and expenses either online or on a piece of paper.
If you find you have money left at the end of the month, you can increase your saving amount for your emergency fund. Try to be aggressive in saving, at least until you’ve got at least three to six months’ worth of expenses set aside.
What Do You Do If You Have An Emergency Right Now?
While the above steps will help you build an emergency fund from scratch, what should you do if you happen to have an emergency right now that needs your immediate attention? Come see us at Texas Car Title and Payday Loan Services, Inc. for one of our loans.
Title loans can get you as much as $15,000 based on the value of your vehicle. If you have a smaller emergency, a payday loan can get you between $100 and $1,200, while an installment loan could give you between $100 and $1,500.
You can only get a title loan if you have a lien-free title to use as collateral, are of legal age, and have a vehicle that is in good condition. Payday loans don’t need collateral because we determine if you qualify based on your ability to repay and your income.
Likewise, our Installment loans are similarly based on income, but you will repay us in installments and not all at once. The best thing about our loans is, that if you’re approved, you could get the money either on the same day or the next working day.
Reach Out To An Agent Today
Having an emergency fund can help you with various situations, so you need to do whatever you can – and use whatever financial options available – to build your fund. This is still the case even though emergencies can be very unpredictable.
So if you are building your fund, follow the above steps for help! If you do have an emergency and need help, fill out the online application on the Texas Car Title and Payday Loan Services, Inc. website right now to get one of our loans!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.