Budget Before the Emergency
Start by setting a smaller goal, like saving $500. While this may not be enough money to cover some emergencies, like a new transmission or surgery, it can build a foundation and help you avoid pulling out the credit card for every unexpected event.
Jumpstart your emergency fund by using a large deposit from your tax return, selling items online or keeping what’s left over from your paycheck after a month of seriously cutting back on spending. Having a base to start from will motivate you to grow this account even more.
Decide on a monthly goal that you can afford and, even if it takes time, make sure to consistently contribute that amount to your emergency fund. You may be tempted to skip a month here and there if your budget is tight, but try to adjust your lifestyle expenses – whether it be a gym membership or Netflix subscription—and make the emergency fund a priority.
Today's tip brought to you by Mvelopes and Money4Life Coaching.