Babajide Okeowo
In life, nothing is guaranteed. That’s also especially true of our finances; our jobs aren’t a sure bet and unemployment can beckon at any time as well as major, unexpected expenses. Do you have little money set aside for a financial emergency? Here are some steps to fix that and help you sleep better.
Set a goal
Setting clear and realistic goals is the first step to achieving great things. Use your total monthly net take-home pay to create a reasonable savings goal. Visualise reaching your goal and track your progress along the way. Start slow, stay steady and watch your stash of cash grow bit by bit. Avoid the temptation to dip into your fund for any reason except legitimate emergencies. You’ll be surprised how having this little self-made insurance policy gives you extra peace of mind.
Put the word out
Let your friends and family know that you’re working toward a financial goal. This helps develop a community of support. You don’t have to divulge your deepest financial secrets; just communicate that you hope to save by skipping a few lunches out. Success is contagious, so don’t be afraid to share how well things are going. You might just inspire others.
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Spare some change
Although it may sound like a painfully slow and old-fashioned strategy, our parents and grandparents knew the power of saving a dime at a time. Start a new habit of paying for everyday purchases exclusively with cash, pocketing the change. Funnel all that spare change into a jar, and let your savings grow the old-fashioned way.
Start a part-time job
If you have skills that can be marketed in a freelance capacity, consider launching a part-time business to partially fund your emergency account. Or, perhaps, an evening or weekend job can give you a quick leg up on savings. Don’t lose sight of the goal: Pocket what you make, and keep your lifestyle low-key.
Sell the excess
Take a moment to look around: Are you sitting in a home or office filled with excess stuff? Stick mental price tags on all those old clothes, unused electronics, dusty video games, and idle bicycles. Sell them on Jiji, post them on OLX, host a yard sale or work with a local consignment shop to turn your clutter into cash. Devote your windfall to your emergency fund.
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Save the extra
If you’re lucky enough to receive a cost-of-living pay increase or a one-time bonus for a job well done, consider adding the extra cash to your emergency fund.
Get that overtime
If your job has opportunities for overtime, use them strategically to build your emergency fund. Keep track of your overtime hours and transfer that amount into a savings or money market account each pay period. When you hit your goal, phase out the overtime, or set your sights on the next financial target.
Finally….
Building an emergency fund from scratch takes perseverance and discipline. But it doesn’t have to be drudgery. As with any focused project, you’ll be surprised how energising small successes can be. Before you know it, you’ll have an emergency fund that will help you sleep at night. Who can put a price on that?
