Emergencies are unfortunately inevitable hence the need to plan for them financially. But how do you manage to pay your monthly bills and still have enough to put aside for a rainy day?
Here are some easy ways to build your emergency fund.
1. Safe first
Don’t wait until you’ve dealt with other expenses to save what is left over. Once you get paid each month, set aside a certain amount into your emergency fund before you start making expenses.
2. Automate The Process
Set a standing order with your bank so that at a particular time each month, an automatic transfer from your salary/business account is made into your emergency fund. This deals with the issue of forgetting thereby ensuring that you stay consistent with building your rainy-day funds.
3. Stash The Extras
When you receive extra income like pay raise, bonus, cash gifts and others, make it a habit to stash them instantly in your emergency fund. This will take you closer to your savings goal.
4. Cut Your Budget
Do you really need every colour of shoe to match all your belts? Do you need to subscribe to the highest bouquet on your cable TV? Must you eat N2000 suya every day of the week? Free up extra cash any way you can and put in your emergency fund. You never know when they’ll come in handy.
5. All your money to grow
Ensure that the money you’re saving is working to make you more money by putting it into a high-yield account such as a money market account. That way, every extra naira you drop into your emergency fund provides you with a maximum return on your investment.
With these tips, you’ll never be caught unprepared by any of life’s curveballs.
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