Life often has a habit of surprising us when we least expect it. Sometimes we get nice surprises such as a friend’s wedding, but other times life may surprise us with something bad, like our P45 or an eviction notice.
Worryingly, a quarter of Brits have no money saved for a rainy day. As a result, many turn to credit cards or loans in a bid to cover the cost of emergencies.
Making an effort to save an emergency fund can really help to minimise stress at a later date. Not only can a healthy savings account help in the event of a disaster, it can also give you the freedom to take risks and make ‘reckless’ that could improve your life for the better. For example, having a large savings fund would allow you to quit your job if you were really unhappy or even go travelling for a long period of time.
Here are just a few reasons why you should start saving an emergency fund as soon as possible:
1. You could lose your job
2. You may decide to quit your job without another one to go to
3. Your car might break down
4. You could be evicted from your home
5. Your relationship could come to an end
6. You might get offered your dream job – but it pays less than you currently earn
7. A friend may invite you to a wedding at the opposite side of the world
8. Your pet could get really ill or hurt in an accident
9. A friend may invite you to go travelling with them
10. You (or your partner) could get pregnant unexpectedly
How do I start saving an emergency fund?
Saving a percentage of your wages is often easier said than done, but by making a few cutbacks here and there, you’ll soon start to see your savings fund grow. Try to live below your means for a while – this could involve giving up nights out, introducing a shopping ban, or ditching your favourite foods for cheaper alternatives.
It’s also worth looking for extra ways to make money. For example you could ask your boss for a pay rise or find a new job. If your home is filled with clutter, sell your old belongings on eBay and do the occasional car boot sale. And if you have some spare time, embrace the concept of ‘side hustles‘. Perhaps you’re a talented writer – if so, start writing for businesses on a freelance basis. If you’re bilingual, become a tutor for those looking to learn a language.
Here are a few posts that could give you some ideas: