How To Build An Emergency Fund

Happy new yeareveryone! We hope you had peaceful and insightful celebrations. Here at TheHelp, we’re gearing up for another year of helping businesses grow andflourish. It has been an honor to serve you and support your business and welook forward to more years working with you.

Every year, a lot of people (whether they admit it or not) make new year resolutions. That’s basically us telling ourselves that (perfect as we are) there could be changes to be made in order to be better versions of ourselves. That’s a good thing, right? There’s always room for improvement. Most resolutions revolve around health and happiness with a few dashes of altruism. The most popular new year’s resolutions include^[1]:

1. Exercising more

2. Eating healthier

3. Spending more time with loved ones

4. Losing weight

5. Living more economically

6. Spending less time on social media

7. Improving job performance

8. Reducing stress

9. Quitting smoking

10. Cutting down on alcohol

We’re walking intothe new year tentatively, with a lot of things still up in the air. It’s nowonder why the top 5 resolutions are all about “future-proofing”. We want to beready for what’s coming.

The whole world isstill trying to get back its rhythm. Everyone is still trying to rebuild.Economies around the globe are still unstable and job markets have minimalmovement. It’s best to be prepared and to have an emergency fund built up justin case of unforeseen events. It’s time we learn to secure our finances, hereare a few tips:

Same bank, different accounts

Open a savingsaccount in the same bank as where you get your pay. This gives you easiermobility to move your money between your payroll and your savings account. Ifyou can, arrange for automatic funds transfers so you can be sure that you’vesaved money before you even get the chance to spend it.

Have a budget

First, you have tocompute how much it costs to support yourself: that’s your income minus yourexpenses. Draft a working budget and try to keep within that. Don’t forget toinclude savings into the computation. Extra money can go into non-essentials,wants, or more savings.

Keep a record

It’s easier tospend money if you can’t see it. That’s how people get into credit card debt.Having a visual reference of how much you earn vs how much you spend will giveyou more visibility over your spending habits and more control over yourfinances.

6 months worth of emergency funds

Start building anemergency fund. A good number is about 6 months worth of salary. This meansthat your emergency fund can tide you and your family over for about half ayear.

50/30/20 rule

Some people set uprules for how to spend their money. The 50/30/20 rule says that 50% of yourincome goes to basic needs, 30% for personal wants, and 20% for savings. Thereare varieties to this rule, but 20% of your income going to savings makes iteasier for you to build that emergency fund we talked about earlier.

What are your new year’s resolutions? Share them with us in the comments. Remember to work smart and be a blessing to someone today. Stay safe and healthy!

Written by Jaie O. TheHelp

^[1]Statista.com