How do I build an Emergency Fund?
The following are few steps to an emergency fund:
Do not touch your emergency savings unless there is no real emergency. Preferably, you will be saving this money aside for a rainy day. This means, you should evade touching these funds for investments, non-essential items or activities, and common leisure. This money should be your last option, so all the time protect it.
Start now! As stated by Aristotle: “The beginning seems to be more than half of the whole.” Take action now. You are doing this for your ‘emergency’ fund, so the faster the better!
Start slow. A rupee saved is a rupee earned! You can even start with Rs.10 or Rs.20 a day. If you save Rs.20 a day (that is Rs.140 a week and Rs.7300 a year!). If you can save Rs.500 a week, you will have Rs.26000 a year – a substantial amount to meet emergencies. You will be stunned how rapidly small amounts grow over time!
Celebrate your milestones. Fix attainable goals and rejoice them. Rejoice your first Rs.1000, first 1 month and first 3 month emergency fund mileposts.
Run in your own lane. Saving lesser amounts might be tough for few people. Just focus on what is correct for you and your family.