An emergency fund is money saved for unexpected events or expenses. It is important to have an emergency fund in place both to keep you financially stable and reduce stress should the unexpected arise. Here are some tips on how to create an effective emergency fund:
• Start small – start by setting aside a little each month until you can save enough of a cushion that feels comfortable;
• Automate your savings – set up automatic transfers so that when payday arrives, part of it goes straight into your emergency fund;
• Be realistic – determine how much you need by considering lifestyle costs such as rent, bills, transportation and food;
• Let it grow - add extra whenever possible and don’t use it unless absolutely necessary.
Creating an emergency fund will help provide financial security during challenging times.