Having an emergency savings account is a great thing by itself. However, what’s the point of having one if you don’t have enough money in it? We are not saying your emergency savings account has to bulk up overnight. While it is a steady process, you can take some little steps to boost your emergency savings account.
The more money you can save towards your emergency fund, the more prepared you’ll be to deal with the setbacks life throws at you.
We do acknowledge the fact that saving money isn’t always easy, especially in this economy. So, how can you save more to protect yourself when things go wrong? Here are some easy ways to boost your emergency savings account.
Related article: Emergency Fund Calculator: How Much Safety Net is Ideal?
Make Money from the Things You Don’t Need
A good place to start to boost your emergency savings account is to sell the things you don’t need. You might just be surprised by the amount you can earn simply by having a clear-out.
Consider this as a thumb rule when clearing things out – if you haven’t used something even once during an entire year, it is better to get rid of it.
There are lots of ways to sell the things you don’t need these days. You can do it the traditional way through a simple garage sale, or you can use social media such as Facebook’s Marketplace. There are also online auction sites and classifieds you can turn to.
You can sell absolutely anything, too. One person’s trash could be another person’s treasure, so don’t assume something won’t sell. Go through all of your belongings and be ruthless with the things you no longer need or use.
Create a Budget
You’re also going to want to create a budget as this will allow you to see how much you can afford to save each month. Write down all of your incomings and outgoings, followed by the amount you have left.
Then, work out how much you can comfortably save each month. Once you have a figure, you can start to make saving a habit. Pay the money into your emergency savings account before you pay any other bills.
That way, you’ll be saving money without really thinking about it. You also won’t miss the amount you’ve saved if you set it to automatically go out of your account when you get paid.
Cut Back on Expenses
Creating a budget can help you with many things. One major benefit is helping you identify the things you don’t need. It can give you a clear idea of what expenses you can cut down.
There are always things you can cut back on, whether it’s saving money on utility bills or cutting down on treats. Having a budget in place lets you see exactly where your money is going and where improvements can potentially be made.
For instance, you could be spending a lot of money every month on takeouts and dining out. A budget tracker can help you identify this. You can cut down on this by starting to cook more meals at home from now on. Similarly, cut back anywhere you can while you’re trying to build up your emergency savings account.
Pay Attention to Your Employment Benefits
A more drastic way to boost your saving would be to utilize employment benefits. If your job doesn’t currently offer much in the way of benefits, it may be time to look for a new one.
If you can gain employment with a company that offers health insurance and retirement savings plans, for example, you won’t have to pay for these yourself. You can then use the money you’re saving to put into your emergency fund.
Invest and Save the Capital Gains
It is not wise to keep your money idle even if it is for an emergency fund. Instead, try investing in some non-risky liquid funds where it is possible to earn a decent sum. For instance, you may try investing in gold. Gold has always been a bullish commodity in the last two decades, and it is very easy to liquidate when you need money.
You may also try investing in some low-risk funds like S&P 500 index fund (this mimics the S&P 500 index). It might witness some ups and downs in the short term. However, over a decade time, it has provided consistent gains. The average S&P 500 index fund has provided 13.6% returns a year over the last decade, which is quite awesome.
Wrapping Up
Having an emergency fund is essential, but it isn’t always easy to save a consistent amount. Even if you are not able to set aside a particular amount every month, you can add money to your emergency savings account whenever possible.
Follow the above tips without fail and give your emergency savings a boost without it negatively impacting your finances.
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