How To Get Away With Finally Building an Emergency Fund – A Rookie’s Guide
Why does saving money have to be this hard?
At least that’s what you’re probably thinking as you stare at your dry savings account in the bank, yeah?
Like most, you’ve tried to do the whole emergency fund thing but a pimp has responsibilities man.
Car payments. Vacations. Running from Sallie Mae on the regular.
So although you have the best intentions possible to start putting money to the side, you’re dead set on the belief that it isn’t possible.
Or is it?
Here are the facts.
Why You Can’t Keep A Savings To SAVE Your Life
If an emergency happened to you right this second (such as a car wreck, ER visit, pipe burst in your bathroom) could you pay for it without borrowing it?
If you said no, you are probably shaking your head with the majority of Americans who don’t have at least $500 in savings. 6 out of 10 people to be exact.
Don’t feel bad though, I was there too.
In fact, I had no idea about an emergency fund at all. I could barely scrape by as it was so if I got any extra money I immediately rewarded myself.
But in Dave Ramsey’s Total Money Makeover and reading other articles, I learned that in order to get your debt in formation, you must stack up a savings account first.
Because if an emergency were to happen and you didn’t have the money, you would run right back to the credit cards and loans to cover your expenses.
We do this all the time. That’s the missing link. That’s the reason we keep running on the hamster wheel.
But wait, what qualifies as a financial emergency? Glad you asked.
I believe that a savings can give you cushion, more peace, and a closer step to freedom in your finances and post-grad life.
A savings has allowed my friend Robert to prepare to leave his full time job for his dream of DJing. It has brought crazy focus to my sorority sister Bry as she plans to get her own apartment. It covered ME when I got in a car wreck last month and was able to pay for repairs without stress.
If you just committed a month to saving an emergency fund, you would be amazed at how quickly you could do it.
7 Fast Tips To Jumpstart Your Journey to A Poppin Savings Account
So if you’re still with me, I’m assuming you’re ready to do this thing.
You’re tired of have stone cold panic attacks when the unexpected happens. Like Jay-Z’s tour going on sale. I kid. Kind of.
These steps aren’t just for saving for the rainy days either. I challenge you to try these hacks for other savings goals like a car, vacation, leaving your job to start a business; the possibilities are endless.
We are ready for freedom. To not feel guilty when we spend money or avoid our account for DAYS because we know we just went ham with the credit card.
Most advise to save at least 6 months of mula. And trust, I will help get us there.
But if you have no savings or fairly little right now, I am going to challenge you to make $1,000 your savings goal. My little tricks below will help you get there faster:
Set The Target
This seems like common sense but many people can’t save because they honestly don’t know how much to put aside. Many financial advisers suggest at least 10-20% of your income.
WHY: Having a goal will set the intention and keep you focused when you rather just spend it on that product ad you saw on Youtube.
STEP IT UP: Below are questions that can help get you thinking about what you really want to accomplish.
- What is my savings goal?
- When do I want to have it by?
- How will this goal be good for my life?
Now with your answers, create a mission statement that you can use when you start slippin. EX: My savings goal is to save $1,000 in 3 months. This will allow me to establish an emergency fund that will give me cushion to focus on other debt.
Keep your mission close to you in challenging times.
Make It Effortless
We often struggle with saving because we think way too much into it. Once you have a set goal on how much you are saving, take a percentage of your check and automate it into your account.
WHY: You’ll be saving in your sleep. Automation allows you to transfer a small amount of money from your check each pay period without thinking about it. You won’t have time to talk yourself out of transferring the funds that you high key want to use on some new shoes.
You can contact your job’s human resource department or go online where pay stubs are managed to allocate the expense.
STEP IT UP: Do you tend to dip into your savings a lot? Create two accounts. One will be for bills and savings ONLY. The other will be your budgeted play money. If you have a card just for vacations, outings, shopping, etc, you will be less tempted to spend your savings because it’s more work to get to it.
Out of Sight, Out of Mind
The biggest enemies of my wallet are sales. If I see a good deal, I am automatically liable to hop on that mug whether I have the money or not. Avoid sales as much as you can.
WHY: While we think we are getting good deals when we see the buy 2 get 1 free sale, you are actually spending even more money. You didn’t need two items. But oftentimes we use the “this is such a great deal, I HAVE to buy” as an excuse to purchase. Contrary to popular belief, deals will literally always come and go. ONLY seek them out when you have something specific in mind.
STEP IT UP: It’s time to clean house. Go through your emails and unsubscribe from all the stores and companies that send you deals and sale ads to your inbox. Online shopping has become the enemy because we don’t even have to make an effort to put on pants.
Get them out of your sight and you won’t think about it as much.
You’re probably thinking like what? I thought we were saving? A lot of our issue is that we are spending money left and right on things that bring no joy to us.
Did we really have to go ham at the bar like that? And did you truly need a whole new collection of MAC lipsticks for fall?
WHY: If we focused more on investing in the things we truly love, we will save so much money in the end. For example, instead of going out every weekend to the same club that always has a fight, save that money for a vacation across the country that you’ll never forget.
STEP IT UP: Make a list of things you really need or enjoy. Focus solely on that and eliminate the rest of the things you waste money on. Those meaningless happy hour bar wings won’t be missed when you see a stack in your account.
WHAT Raise *Debo voice*
So you got good news. Your boss decided to give you a promotion! And promotions comes with – you guessed it – a nice raise. What should you do with the extra money? Throw more into savings of course.
WHY: We have goals to reach and they don’t stop just because we got some extra coin. When you hear the term “living below my means” this is exactly what people mean. You might have the dollars to ball a little harder but choose to practicing shooting more in the gym.
STEP IT UP: Strategically look at your budget and see how much money you can forfeit to get to your savings goal even faster. This goes for any extra money like tax refunds and bonuses.
Bye Bye, Subscriptions
I’m sure you own at least one subscription to something you never use. Get rid of those, breh.
WHY: This is literally money we throw away every month. I was in two mastermind groups that I never used but it still came out of my pocket. It seems small at first (one was only $10) but that’s $120 a year I could be saving.
STEP IT UP: Go through the subs. It could be Netflix, Spotify, or even cable. But the extra money you gain can be budgeted into your savings account.
Don’t Be A Psycho
Saving and being responsible is one of the most empowering things you could ever do for yourself. But don’t get so obsessed with saving all your money that you forget to enjoy it. Treat yourself to the things you love. Buy the dress or watch you’ve been eyeing for a long time. Just don’t get crazy.
Emergency funds are powerful. They are the first major step to freedom in your finances.
You CAN afford a better life.
So let’s do it. You with it?