W e would all love to live in a perfect world where we could live blissfully off our monthly incomes, pay our monthly expenses and spoil ourselves every now and then.

 

Why you should save for a rainy day

The truth is that there are no guarantees in life; therefore it’s vital that you plan ahead for those unexpected expenses that could set you back for months or worse, leave you in financial dire straits. Imagine your car breaks down and your insurance cannot cover the payment damages, or you lose your job? This is unfortunately the reality we must face and it is imperative that you start building an emergency or rainy day fund that will assist you with any financial burden that may arise unexpectedly.

We must come to terms with the fact that the global job market is not steady. Here’s a thought… If for any unfortunate reason you found yourself unemployed with a mountain of bills to pay, how are you going to survive? Experts advise that you should build up an emergency savings fund large enough to cover all your monthly expenses for up to three to six months. If you are calculating this number in your head now, it probably seems like a big chunk of money, but remember this amount takes months or even years to build up.

 Why you should save for a rainy day

Many people deliberate on the fact that they cannot afford to save as their monthly living expenses are very high, but when an emergency does occur the money is always there. If you make saving a priority you will be left with a more relaxed piece of mind, knowing that you are covered.

Here are some useful tips to start building an emergency savings fund:

Review all your big and small monthly expenses:

That lovely cappuccino every day before work or all those long evening phone calls to friends could be costing you more than you think, once you add them up every month. Try and cut out all these frivolous expenses from your budget and rather invest this money into something essential.

Setup a direct debit:

The easiest way to start your emergency savings account is for it to come directly of your pay check into a separate savings or money builder account. If the money is not in your account, you will not be tempted to spend it. The debit order can be adjusted, but try and stick to a set amount that works for you and your monthly budget.

Do not touch your saving unless it’s an emergency:

Having a fashion sale or going on a discounted holiday is not an emergency expense. Do not trick or tempt yourself into justifying why you should use your savings. Rather forget that it’s there and live within your means.
Starting an emergency savings account is one of the best decisions you can make this year, in order to protect yourself and your loved ones in the unforeseen future. The most important aspect to consider is that an emergency fund is not supposed to make you rich, it’s supposed to keep you from being poor.

For more information visit the following liks:
www.personalfinanceopinions.com
www.netplaces.com
http://beginnersinvest.about.com
www.mainstreet.com

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