One of the most secure ways you can feel taken care of when it comes to your money is having an emergency fund. So listen, emergencies are going to happen. And here’s a way to bulletproof your emergency fund.
emergency funds are wonderful. If you haven’t been around this blog for very long, I always teach people to get $1,000 emergency funds.
Get out of Debt ASAP
First and foremost, the very first thing you ever do is get out of debt as quickly as possible, everything but your house, and then bump up that starter emergency fund to three to six months of expenses. having an emergency fund is like a breath of fresh air.
Like once Winston, I got that in place. It was like, okay, you know, if something were to happen, and everything, you know, just goes down the drain, we have six months saves that is here. And we’re going to be okay, it’s huge to be able to get this but you want to make sure that you actually keep your emergency fund. So here are ways to make sure that your emergency fund is bulletproof.
Don’t use a checking or saving account
The first thing that needs to consider while building an emergency fund doesn’t keep this just in your checking or savings account. Here’s the deal.
If this is an account or a bank that you primarily use, and you keep pulling it up every day to like look at transactions, that kind of thing. It may be tempting for you to be like, you know, we’ll just take some of that emergency fund and we’ll use it here or if it’s sitting in your checking, oh, good lord, it’s gonna get spent let’s just be honest, really taking it out and putting it somewhere different. I’m even to the extreme case because this is what Winston I do.
Related Articles:
7 Tips to Spending Money Wisely
How To Save Money For Retirement
Use a Separate account for Emergency Fund
I don’t even want the temptation of being able to easily get to it. And that’s the key you want to be able to get to it. So you want your emergency funds accessible, but not so accessible, that it’s easily dipped out so, for me, it’s good just to have them completely separate.
Number two, emotionally unplug from it. Okay, as a spender. This is something I’ve had to do once tonight at the beginning of our whole journey as we got married and stuff. I’m like.
Okay, how much money do we have in savings? And he would always say the amount because he would look it up on his phone, and he would count the emergency fund in our savings. And I’m like, Oh my gosh, we’re wrench.
Not really but like, like, dang, we can do so much stuff. It’s like, Well, no, that’s just such as part of our emergency fund. Honestly like I’m I just want it completely separate. So when we talk about the savings that we have, we don’t even talk about the emergency fund.
because I can look forward to seeing things that we are saving up for. But again, that it’s not too much implied because if an emergency happens, use your emergency funds. That’s what it’s there for. But I act like we don’t even have one. But I know we do. So I can sleep well at night.
Do you actually know what an Emergency fund is?
Another way to bulletproof your emergency fund is to know what an emergency is. Okay, so one day, if you’re like, Oh my gosh, we can Airbnb our house and then just go to Hawaii that week. Instead, we’ll just take it out of the emergency fund. And when we get the funds from Airbnb, we’ll just fund it back.
No, no, no, that’s not an emergency, don’t touch it. Or we want to upgrade our house. Okay, we have some money saved. If we take our emergency fund, then we can get a great down payment.
No, no, no, that’s not an emergency and an emergency fund is when things come up that you cannot afford to pay for if things are just not, you know, extra funds are just in your checking account. Okay?
This is for stuff, big stuff. Usually, that comes up car trouble heating, and air goes out all these types of things that happen and you’re like, Oh, my gosh, you know, what are we going to do?
Well, the emergency fund, that’s what it’s there for only for emergencies. Vacation isn’t an emergency down payment on a house, not an emergency.
Keep 6 months of Expenses in the Emergency fund
Keep at least 6 months of your expenses in emergency funds & even don’t touch it, your fully-funded emergency fund, so stay intense and stay focused. And it’s helpful to look at your expenses and say, okay, per month, this is what we need to live on, and then multiply that by three, or by five, six, whatever you decide between three and six months and have an actual dollar amount that you’re shooting for.
Having that goal in mind is huge because you can back your way out of it and stay intense. And, when it’s hit, you’re like, Okay, we did it. And so I want you to be able to get to that point to move on to baby steps four, five, and six. And if some of you out there like wow, I need an emergency fund and you need some cash to kind of get this kick-started.
