The Need of Setting Up a Personal Emergency Fund

The Need of Setting Up a Personal Emergency Fund

Savings is one of the major tasks that can you in the unforeseen activities in this life that require money for instance retrenchment, medical emergency or even sudden damage of household goods. Emergency savings is easily said by many individuals than done. With inflation; a rate touching the sky which is inversely proportional to the increase in the income further poses a hurdle in the act of saving.

However, careful spending and keeping track of the expenses can go a long way to save money for an emergency. At the same time there is nothing which could be termed as the best way to save an emergency fund, but here are some money saving ideas that would help you to discover ways to save emergency funds.

Set up a monthly budget

This is the first step in setting up a personal emergency fund as revealed by a financial experts in Singapore. Few people usually try to set up a budget for the income they receive yet setting a budget will take like up to 4 hours.

Even if you are employed or self-employed, it is good that you know the amount of money that you make a very month and how much you spend. You can write down all the sources of income and then add them up. Drawing up a budget should have three columns that for income received, fixed expenses and then flexible expenses (personal expense).

Determine how much you are spending in a month and how much money remains as savings. Try to monitor your income for around four months to have a clear understanding of your spending costs. Write off your debts. Debt is a burden. Just keep track of the money spent on your monthly debts and am sure this would occupy a significant portion of your expenses.

Find ways to get rid of debts and this way you would find some money which can be used to save and invest. If you have any outstanding debts, such car loans and mortgages just give the priority to avoid incurring extra interest rates. Alternatively, you have visit Credit Excel Capital Pte Ltd to find out more about fast loan that can help you to pay off when in need of emergency. Because shit things always happen and you do not see it coming.

Decide the amount that you set up in your emergency account.

Set realistic goals. Goals can help you achieve what you desire. Set short-term and long-term goals. Short term goal may be like buying a flat, household appliances or any other thing you may desire. But, long-term is saving for your future or after your retirement. Plan and allocate funds for all the needs. Try to achieve them, and you will feel elated when you progress after a few months. Setting goals are one of the best ways to save emergency funds. A goal will be determined by the amount that you earn. You can approach a your best friends in Singapore who will guide you on how to set up a good goal.

Keep track of all your expenses.

If you are keen on saving emergency funds, then you have to keep a record of all the expenses you make. Allot a notebook or a diary and make a note of all the expenses you make be it small or large. Once you make a record, you will know the amount spent on each of the household expenses such as utility bills, telephone bills, the amount spent on eatables, entertainment expenses, etc. Keep doing this, and you will know the expenses on which you can put a control or reduce so that you can increase the amount that you will save.

Evaluate your expenses.

Take a deeper look into your spending habits during the past months. There would be some expenses that would have occupied a smaller amount but would add up to more substantial amounts. For example, the amount spent on entertainment or hotels would have been done once a month, but remember they all add to your expenses. Try to avoid eating out every day at a restaurant; you can cook your meals at home as this will be a bit more economical.

Try to find out those little expenses and keep a curb on them. Keeping a curb on the expenses would go a long way in generating some best money saving ideas shortly. Reduce the use of Credit cards. Credit cards no doubt are a handy and a safer medium for carrying cash. But, at the same time, you will have no control over what you spend.

You always tend to purchase something extra when you don’t see the actual cash being shelled out. Remember, you will have to pay them back with interest. Think twice before you spend and this is another best way to save money. You can carry cash whenever you are shopping. Try to stick to the budget to the rather even if you find anything that is interesting do not buy it using your credit card.

Some of the best institutions that you can save your emergency funds with are Citibank interestPlus savings, OCBC 360 and Standard chartered Bonus Saver. These institutions normally reward a higher interest rate to their customers who save consistently without withdrawing.

Finally, if have never faced an emergency in your life, you may continue to spend all the income that you earn thinking that the situation will be like that forever. Emergencies can make you to panic if haven’t saved any money in your account; it can also be challenging to find someone to help you at that time.

The best thing is that you can approach the financial experts in Singapore as they will give useful guidelines on how to set up an emergency fund. If that is not enough, you can also look at the above guidelines that will assist you to in that process of saving. Many people in Singapore have followed this tips, and they have lived to enjoy the rest of their lives as they can encounter any emergencies, why not you?

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