How to Start an Emergency Fund

Most people do not plan adequately for the future. It is attributed to the tough economy that makes it difficult to save. Studies indicate that majority of Americans lack a fund that caters for their emergencies. Hence, most people rely on sources that are outside of their income. As such, these sources are never guaranteed. They may include sourcing for bank loans, asking of funds from friends as well as selling household goods.

emergency fundThe disadvantage with bank loans is that they attract higher interest rates. In cases where one fails to pay the loan, it can lead to loss of hard earned investments such as properties. Friends may also lack the financial capacity to offer assistance as they may have their own financial hurdles. Financial advisors advocate for emergency funds to take care of eventualities that occur. These experts propose having savings that can cater for expenses of more than six months. You could be wondering how to start an emergency fund. However, it is easy. You can choose the various methods proposed.

Here is a closer look on ways to start your emergency fund

Spend saving the change

When you are spending your money, ensure that the change is saved. Most people prefer the use of credit cards when purchasing items. However, the use of cash can help in saving for your future. You will be astonished by the amount of money you will save for a month.

Savings account

You can choose to open a savings account in a bank. The accounts ensure that the access to your savings is limited. The accounts offer seasonal access to the funds. It is because the funds are meant for occasions such as the holidays. Thus, by withdrawing the money before the due date, it attracts a penalty. The penalty will ensure that you develop the discipline for patience on your savings. It is not often that we are faced with emergencies. Hence, the savings account can help in building your emergency fund.

Avoid impulse buying

Impulse buying has been linked to increased spending. You can choose to avoid it by purchasing the items that you only need. It will help in avoiding purchasing items because they are on sale or are appealing to your eyes. It will also help you in spending less money. Thus, it will assist in saving the money that would have been spent. It will lead to building the emergency fund.


Emergency funds are not easy to build. However, with dedication you can face the emergencies courageously. The options recommended may not help in accumulating a lot of money. However, they can assist in developing the habit of saving. Thus, the proposed methods assist in knowing how to start an emergency fund.


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