Creating an emergency fund isn’t difficult so learning how to start shouldn’t be either. Here are 4 amazing strategies and tips to building your nest egg for a rainy day.
Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.
Lets get started!
When an emergency occurs, you’ll be ready
We can’t predict the future, but we can sure prepare ourselves for it when a rainy day disrupts our parade. Having an emergency fund allows us to have a peace of mind and also creates financial confidence. As Grant Cardone says, assume control of all situations; so prepare now so you’ll be ready later.
#1. Create an Emergency Fund Goal
When you don’t know where to begin, start by creating an emergency fund goal first. Everyone’s goal will vary due to income and the amount of debt carried. A good minimum would be $1,000 – $2,000. An ideal and longer term amount would be $10,000+.
Did you know that more than 50% of Americans can’t afford an emergency bill of $500? There is something seriously wrong with this.
DO NOT be part of this statistic, create your emergency fund goal right now. Literally right now. Just set it, and work towards manifesting it. YOU CAN DO IT.
Before you begin to build your hefty nest, make sure you’re debt free first. Contributions will be so much easier this way. If you’re not debt free, set the goal for your small emergency fund and work on eliminating debt before you start paying yourself first.
#2. Pay Yourself First
When payday comes, be sure to pay yourself first (SAVE). We often tend to splurge and sometimes put away what’s left. You know exactly what I’m talking about.
Paying yourself first is the complete opposite; spend after you’ve put money away towards savings. Check your calendar and see what must go towards your expenses. Deduct it from your earnings and focus on saving the portion that will help you reach your goal.
Find which week works best for you out of the month to save. Once your expenses have been taken care of, pay yourself first, and enjoy what’s left. If most of your income covers your expenses be sure to check out my post on the7 easy ways millennials can start earning more money to see how you can earn extra income.
Now that you have your target, you understand how much you must put into savings every month to meet your emergency fund goal. Do what you have to do in order to make this happen.
Make sure any additional cash is directed towards your money goals.
#3. Don’t Let Your Savings Collect Dust
This is where you take the first steps towards allowing your money to work for you. Put it in a high interest savings account.
Keep about a quarter of your savings in your personal savings account as liquid asset (money you can take out immediately). The more you put into your high interest savings account, the quicker you will reach your emergency fund goal through the amazing work of compound interest.
In other words, discipline yourself to save for your emergency fund.
Saving money might seem like a sacrifice at first but by being consistent you’re now creating a great habit and financially stable life. Your future self will thank you.
Remember the importance of having an emergency fund. The benefits of being prepared include:
Having money in case of car issues
To cover emergency hospital bills
Security in case of a layoff
Financial peace for your family
The best way to carry out your mission on building your emergency fund is to put money away every month no matter how good or bad it was.
Develop this winner habit and you’ll be meeting your goals in no time.
Keep yourself motivated
If you find yourself losing motivation remember why you started in the first place. Nothing good ever comes easy.
Look for motivational and inspirational accounts on Twitter or Instagram. I personally post motivational content from time to time on IG.
Don’t stop at nothing.
Here are some life changing accommodations to help you save money
1 – Don’t get into further debt. Wait on that awesome new car model that just came out. Perhaps work in your field a little longer before furthering your education. Remember, the more debt you have the harder it is to save.
2 – Start a side hustle. Use that additional income to add to your emergency fund and reach your target quicker. Don’t stop increasing your income.
3 – Live below your mean. This strategy will allow you to build your net worth so that you don’t live paycheck to paycheck.
Let me know in the comments below
Have you reached your emergency fund goal?
The readers would love to hear from you. Share your thoughts below.
Financial goals are the big visions you have for your personal finances and the way you plan to spend your money.
These financial goals are what help us achieve ultimate success and financial freedom. They also make our dreams easy to identify.
Why Do Financial Goals Matter?
Financial goals push us to keep moving forward in our day-to-day lives with a relentless focus on reaching life changing goals.
They’re what will determine how comfortably we live our lives when we’re ready to retire.
Financial goals are what separate the lower, middle, and high class.
You’ll learn the importance of becoming debt free
How to adopt winner habits in order to secure your financial future
Ways to diversify your income
If you’re here it’s because you have a genuine curiosity on how to succeed financially in life. The great news is that what led you here is no coincidence. I strongly believe we attract into our lives what we think about. Navigate this platform and manifest.
Here are 10 ways you can begin setting financial goals for yourself in order to eliminate any financial insecurities you might have.
Don’t forget to subscribe to our newsletter to be notified when a new post is published!
#1. Paying Off Debt
Paying off debt is a financial goal everyone should strive for. Accomplishing this goal is your ticket to becoming financially free.
Everyone wants to be debt free but not everyone is willing to put in the work to break from the shackles of debt.
Some benefits to paying off debt include:
Freeing up resources to save and invest
Eliminating monthly payments to lenders
No more interest
Surge in credit score points
Paying off your debt will require temporary sacrifices, such as living below your means and delaying gratification.
I’ve found that the snowball effect is very efficient when it comes down to paying off debt. You essentially start from the smallest debt and work towards the biggest debt. You can read more about it below.
If you find yourself straying from paying off your debt, remember why you started in the first place. Crush this financial goal so you can focus on all the wonderful things in life that truly matter!
#5. Making Your First Investment In The Stock Market
This financial goal is probably the most intimidating goal of them all. You most likely have thought about investing in the stock market but perhaps don’t know where to start.
We walk our readers on how to invest in the stock market step by stephere.
The stock market might not be everyone’s choice of investment, but for those of you who want to partake will see just how easy it is to purchase shares and see your money grow.
Before you begin to invest in the stock market, be sure you:
Are debt free in order to maximize your deposits in the market
Have created a strong and healthy emergency fund
Acquire the confidence to proceed with investing in the market
Investing in stocks has the the biggest potential if you’re striving to build wealth. With the S&P 500 yielding an average 7% in return, it’s highly unlikely you’ll ever see this percentage from any bank or institution.
Are There Other Alternatives To Investing?
A very good alternative would be to put your money in a high yielding or money market account.
While your regular banks pay you 0.01% APY, high yielding banks can pay up to 2.05% APY!
Rates fluctuate from time to time depending on the economy, but it’s a great money move; especially if your financial goal is to grow your savings account.
Here’s a list of high yielding banks you can check out so your money can earn you a little bit of interest (money while you sleep):
Yahoo Finance reported from a 2019 survey that 64% of Americans will retire broke.
I think it’s safe to make retirement a priority when it comes to setting financial goals.
Retirement should be the time where we can finally look back and feel like all the hard work has paid off. It should be that time period where you can sigh in relief knowing you won’t ever have money troubles.
Around this time you’re most likely earning passive income from a variety of sources. Perhaps your investments are paying tremendous amounts of dollars every month or your online business keeps generating income.
Money during this time is working for you and you can enjoy anything your cashflow is able to provide.
How Can I Prepare For Retirement?
Preparing for retirement really includes a lot of the things that we’ve covered over in this post. Such things include:
Start a 401(k) with an employer match if available
Save money using a high yielding or money market account that accrues interest
Free yourself from debt in order to maximize your savings
Invest in the stock market
Invest in real estate
Increase your income
Preparing for retirement will become more of a challenge if you’re not debt free. The earlier you begin to save for retirement, the longer you have for compound interest to put your money to work.
If you’re nowhere near the income peak age you should be focusing on making as much money as possible early on in order to free up your resources so you can start focusing on the things that really matter.
Remember, you cannot grow wealth being in debt.
#9. College Savings
A financial goal that’s popular amongst parents is saving for their children’s college tuition.
A college savings plan will come in handy when your children are ready to take that leap in the real world.
Saving now can help you get a great start. We suggest using a savings account that will accrue interest; this way you earn additional money on top of your principle and recurring deposits. Use compound interest to boost your savings goals!
According to the Wall Street Journal, the average tuition is a whopping $37,172!
It would be wise to start saving for this goal as soon as you can. Personally, we’d opt out for teaching our kids to become entrepreneurs instead so they can earn as much money as they desire. It’s the financially responsible thing to do, but hey! We need all type of professionals in this world.
#10. Financial Education
What better financial goal than to further your financial education!
If you’re not 100% certain about how something works, invest time in yourself and do the homework until you’re confident about such topic(s).
People used to read about everything, now you can watch videos or read blogs like this one for more information.
It took me about 3 months of studying and researching how to invest in the stock market before committing to purchasing my first shares of stocks.
I created my Vanguard account and although I had done some research, it took a while before I actually proceeded. Financial education allowed me to grow confident in all things I do financially.
I wanted to make the process of investing in stocks easier for my readers so I wrote on how to invest in the stock market (step by step). You can read it here.
Don’t forget to subscribe to our newsletter to be notified when a new post is published!
Become Financially Confident
Dear readers, I encourage you to step outside your comfort zone and educate yourself as much as possible so you may become financially confident and financially independent.
Break the cycles and begin to develop winner habits to secure your financial future.
Let us know in the comments section below which financial goal(s) you’ve taken up! Our readers would love to hear what you’re working on.