An emergency fund is a crucial tool that can get you out of a financially sticky situation—doctor’s fees, unexpected car troubles, and more—but only if it’s big enough. Three to six months of living expenses is the typical goal for these savings, which can be hard for anyone to achieve.
So how can you boost your emergency fund without impacting your monthly revenue too much?
Don’t Be Discouraged if You Don’t Have Much Saved Up
Most people are behind on their savings. That doesn’t mean you aren’t out of options in an emergency. You can always see if you qualify for an online personal loan.
Online loans make it easy to borrow small personal amounts in an emergency. That’s because small personal loans have convenient online applications that jumpstart the borrowing process. You won’t have to waste time going to a brick-and-mortar location during business hours. Instead, you can apply to get a personal loan today or in the middle of the night.
Many online loans are direct deposit loans, which means you don’t have to pick up cash or repay it in person. This convenience saves time when you’re in an emergency without savings.
How to Save More in Your Emergency Fund
If you want to make your emergency fund capable of handling urgent, unexpected expenses, you need to save more. This isn’t easy nowadays, so let’s turn to the experts for advice. Here are some savings ideas to help you sock more cash into an emergency fund and other savings accounts.
1. Sweat the Small Stuff
One fancy latte enjoyed every several months won’t make or break your finances. A daily coffee habit, on the other hand? It can be a huge drain on your cash. Any small, regular purchase adds up.
Financial advisor Suze Orman says she never gets coffee to go, even though she can afford it with her $75 million net worth. Instead, she recommends sending $3 a day into a retirement fund or other high-yield savings account. If you can snag a high rate of return with an IRA, you can turn that money into $1 million in 40 years.
2. Multi-Task Savings with Debt
If you have debt from an online loan, line of credit, or auto loan, these payments could be holding your savings back. Paying these debts will give you more money to spend and save at your leisure.
Eliminating debt can be tricky with the emergency fund’s three to six months goal looming over your head.
How can youmulti-task both saving and debt at the same time? Dave Ramsey, a popular Internet financial guru, recommends shifting your savings goal to $1,000 while using the snowball method to cross out debt. Once you pay off what you owe, you’ll be able to sink more cash into your fund.
3. Automate Savings
You don’t want to cook, so you pick up takeout. You get a new phone because your current one is slowing down. You might even splurge on a weekend getaway in an attempt to extinguish burnout. These treats add up and can steal cash you should send to savings.
To avoid short-changing your fund, Ramit Sethi (an entrepreneur and finance advisor) recommends automating your savings. This way, your bank will transfer this money from your account at the start of the month, making it impossible to spend these contributions on non-savings.
Bottom Line:
You don’t have to cut all spending from your budget to save. Sometimes, minor changes in your habits can boost your emergency fund.
Need to up your finances? Check out our guide to make $100 every day…
