How to manage your emergency funds

How to manage your emergency funds

Human nature is bound to revolve around hustle. We all want to bode well with our financial management: procurement, utilization, allocation and savings however atrocities come unannounced. Whenever we are in need of some quick cash, we tend to look for it inside our savings funds. Emergency cash / funds are therefore part of your savings and long gone efforts which become your shining armor in need.

Emergency cash doesn’t imply to the situation where you are cutting down on your daily expenses in a way that leaves you wanting for more or always at a place where it is less than what you need, instead it is the mere idea of saving and working with your surplus very efficiently and smartly. The idea is to meet your current demands and then secure yourself for your future needs. Emergency cash is not some form of punishment; after all not being able to use your money and keeping it way could sound so.

Even though we are all versed with the idea and its utilization, let’s first learn exactly where you can use these funds:

  • Some real life unannounced challenge.

  • When you lose your job.

  • Needs of those you are dependent on you.

  • Accident/ Medical needs

  • Repayment of insurance and a lot more.

So, how would you start? Always craft pedagogy of your set of actions and make it your religion. It is necessary that you only set goals which are approachable. Needn’t make a policy which is farfetched idea, or a plan because such plans usually don’t happen.

  • Learn to knabble first: Bite low and do not almost aim for big. Find a middle ground you are comfortable at, mostly where you know you can contribute. There is not benefit in making big plans and then running back to square one.

  • Do not immediately cut down on your needs, just look for the cash which is overflowing and is being spent at the wrong place. Bargain and think before you spend and this will make a difference in your savings.

  • Look for alternatives: There are many ways with which you can start your emergency funds. Like taking public transport, set up carpool, going to the mall with a list etc. These small changes will make a big difference.

  • Set reasonable milestone: Do not overburden yourself with huge choices, instead set reasonable milestone along the way, as you move ahead. It is necessary that you keep on altering and optimizing your plan.

Before you know it, you will have pool of emergency funds which you can use almost anytime as per your need. Emergency fund is nothing but the money that you usually waste or spend where it is less needed. If you can cut down on something, then you must, since an accumulation of all can be a big amount, big enough to meet your exigencies.

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