5 Simple Ways To Help You Create An Emergency Fund
We do not only offer accounting and tax services in Georgia. We also offer professional advice on your personal finances. One of the areas of personal finance that Jeffrey Fleurinor, CPA can help you with is your emergency fund.
Ideally, your emergency fund should be worth your salary for three to six months. You can use such fund to cover for the costs and expenses that future emergencies may bring. Creating one as early as possible will also help you achieve financial freedom quickly.
Although many people know that they need to create an emergency fund, they do not know where to start. Here are some tips that can help you out:
- Start small
The first step is always the crucial step. In this case, your first step is to start small. Even if you allocate a a small portion of your salary each payday for your emergency fund, it can go a long way. By and by, you will notice your funds grow. Eventually, you will feel a sense of accomplishment and will even have the motivation to continue saving.
- Treat it as an expense.
You should try to think of your emergency fund as an expense that you have to pay for. In that sense, you will feel the necessity of paying it, thereby ensuring that you will save some amount every payday. After paying all your bills, including your emergency fund, you can use the amount left to cover for other costs.
- Cut back on expenses.
There are actually a number of household expenses that you can minimize. For instance, you can go with the most basic cable TV plan if you already have an Internet connection. Whatever expense you can cut back on, put the amount into your emergency fund.
- Round up your expenses during budgeting.
Budgeting is an important planning phase to make sure that you have enough money to cover your expenses for the month. When making a budget, you can round up your expenses to the nearest dollar. You will surely notice a decent amount of savings as a result. You should put such savings into your emergency fund.
- Take advantage of automatic deduction.
If the account where you will be depositing your emergency fund allows for automatic deduction, then, you should take advantage of it. The account will just be automatically deducting a certain amount that you have set from your salary. As a result, you will never have to think about it but you can be sure that your emergency fund is growing.
For sound advice on your emergency fund and other personal finance matters, please do not hesitate to call us at 404-884-9220.