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Guest Post – Procrastinators: Start Your Emergency Fund Today

This is a guest post by Trisha Wagner, a freelance writer for, a debt community featuring debt forums. Trisha writes regularly on the topics of getting out of debt and personal finance.

You have an emergency fund, right? After all it is one of the first pieces of advice a person receives when looking into ways to improve their financial security and future success. So you have one….right?

For those of you shaking your head no, then you are in luck because we are going to discuss not only why it is critical to build an emergency fund but also cover several easy tips to go about starting. Most people will not argue the with the reasons behind having an emergency fund, however somewhere between knowing they should and getting one in place they get lost. The following strategies should get you on the right track to building the all important emergency fund everyone is talking about.

Why do you need an emergency fund?

In the event you don’t have an emergency fund and are not quite sure why it’s so important (you’ve been getting along just fine without one) let us quickly review why having this fund is critical to your finances.

  • The obvious- Emergency funds are initially designed to help you survive an unexpected or emergency financial situation. If you fall ill or lose your job you will have something to fall back on until you can remedy the situation.
  • Prevent additional debt- What do you do if your car breaks down or your furnace decides to quit on the coldest day of the year? If you have an emergency fund in place you can tap into that to pay for repairs otherwise you will likely turn to your credit card, increasing your debt.
  • Peace of mind- There are few things more stressing in the world of personal finance as living paycheck-to-paycheck. By starting and contributing to an emergency fund you will build a backup that you can rely on when money gets tight. You may not have to use it for day to day living but it will reduce your stress greatly knowing it is there.

How to get started.

Now that you have been reminded why it is imperative to have an emergency fund here are a few ways to get started.

  • Start slow and snowball- Like many things in life the hardest step to saving money is getting started. If you do not have much disposable income to start out, do not let that deter you. If you can only put aside a few dollars each paycheck that is fine as long as you begin immediately and stick to it. Many people who didn’t think they could afford to save are surprised how quickly it adds up and as you see it grow you become motivated to contribute even more to build your funds.
  • Automate your saving- You’ve heard this before-probably because it works. Set up a savings account that can automatically deduct the amount you have decided on each payday. You never have to think about it which reduces the chances you will change your mind and decide you need the money for something else.
  • Include your savings on your budget- You know what you have to pay each month in utilities and loan/debt repayments, so include your savings on that list. You are more likely to keep that money once you have a “space” for it on your budget like any other bill.
  • Budget big and save the difference- If you assume you will spend X amount of money on each bill, round it up a few dollars, you can take the difference from the budgeted amount versus the real amount and put it into your savings account.
  • Quit your bad habits- You know what they are. If you have any habits that are not beneficial to your physical or financial heath make an effort to quit today. Not only will you save a bunch of money (smokers can save considerably) you will be be increasing the amount of time you will be around to enjoy your new-found financial security.

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Craig March 11, 2009 at 5:30 pm

Having an emergency fund is key, but for me being younger it is harder to get going. My EF is also my vacation fund with my vacation fund being more important.

Squawkfox March 16, 2009 at 12:14 am

My emergency fund has saved my butt on several occasions. Starting small is a great approach.

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