If there’s any significant lesson that this pandemic taught, it would be the importance of taking care of your health and saving up for emergencies. Life is surely unpredictable and unexpected events like this pandemic can really ruin your financial standing. During the pandemic, many businesses shut down and many employees lost their job. If this happened to you as well, you would know how hard it is to find money all of the sudden. Most especially if you or someone from your family got sick.
Although these situations are inevitable and uncontrollable, you can still minimize the risk of these obstacles through proper planning and mindful saving. One of the most important ways is to build your emergency fund.
From the term itself, an emergency fund is basically the money set aside or saved up for emergencies. This money will allow you to live in your usual way for a few months if in case something unexpected happened like losing a job or paying hospital bills. Moreover, this fund will help you to att/void borrowing money and not being able to save because you still have to pay for your debts.
A lot of financial experts and banks recommend that your emergency fund should be ideally the same as the total of your salary for at least 3 months. But this of course is not definite and can still be adjusted based on your lifestyle and income level.
Identify your financial status
The first and foremost important step is knowing your financial standing. Each and everyone has a different status in life. Some go from one paycheck to another paycheck to pay their own bills and help their families. While some are blessed enough to live independently. But regardless of who you are from those two, it is still possible to build your financial emergency fund especially if you are aware of your earnings and how you spend.
To determine this, you can start calculating your expenses and maybe also label them according to their importance. The most important thing here is for you to know how much your living expenses including the expenses of your family if you are a breadwinner. After that, you should be able to compute how much do you need to save to be able to build a fund that could allow you to live for 3 to 6 months if in case something unfortunate happens.
Set your goals
Just like financial status, goals also vary from one person to another. Once you have identified your financial status and target savings, you can now easily discover how much can you save each month to complete the savings. Just remember to save the amount that is comfortable enough and not to save too much that will mean cutting your necessities.
Being able to know your goals, also allows you to be more mindful of how you should spend and save. It also helps you to narrow down and be more focused on your daily life decisions.
Plan your savings
After setting your goals, you can now start having a more thorough plan of how you will build your Emergency Fund. In coming with a plan, you should create a schedule and also a specific amount that you have to save. Using a budget tracker will also help you to be more aligned. In your plan, you could also set your targets so that you can review your budget regularly.
If you are having a problem with your current income, you may also try to start to have a passive income or look for more ways to earn more. You could also start allocating your budget already and putting your emergency fund as part of the budget so that when your salary comes, you can make it a habit of saving before spending.
In your plan, you could also set and decide on what do you mean by emergency and when only you should spend this.
Open a separate Emergency Savings Account
To help you better in saving, you should open a separate emergency savings account. Make sure to find a bank that provides a decent interest for your savings. But don’t focus too much on the interest because the main purpose of this is to have accessible money in case of emergency.
What’s good about having a separate account is that it helps you to have a psychological boundary between the money you should spend and money you should not. Also, this will help you to be more disciplined when it comes to spending.
The key to successfully forming a habit of saving, you should practice doing it regularly. In saving regularly, you help yourself to be disciplined when it comes to your finances. You can also try to push yourself to have more savings besides your emergency fund. If you have a lot to pay and are also paying debts, you could always start with a small portion of the money. As long as you do it regularly, your savings can go a long way.
But just a friendly reminder not to over save, you should also allow yourself to enjoy from time to time especially that working could be really hard. The key is always to find the balance when it comes to finances so that you can enjoy yourself while not spending beyond your means.
Building your emergency fund makes a huge difference in your financial success. Just imagine going through life where you have no money to get from when something bad happens, it will just push you to borrow money and suffer from interest. But with having an emergency fund, you allow yourself to be more stable in order to pursue bigger financial goals.
Once you have built your emergency fund, you can now start looking for investments that will help your assets grow better. One good example is investing in a condo in the Philippines. Condo living has been essential especially for working professionals living in the provinces. You can be able to live your dream home with the condo design you have always wanted while also investing in something you could use in the future.
If you are thinking of moving in to a new condominium, check out Vista Residences!
Vista Residences is the condominium arm of the country’s largest homebuilder, Vista Land & Lifescapes, Inc. that offers ready for occupancy and pre-selling condominium projects in Manila, Makati, Mandaluyong, Quezon City, Ortigas, Baguio, Cebu, and CDO that are strategically located within major cities, in close proximity to premium universities, transit oriented locations and developed business districts.
At Vista Residences, unit owners can take advantage of the property’s centrality. The properties of Vista Residences are strategically located near the country’s premium universities and CBDs, making them an attractive investment for both local and foreign investors.
Living in Vista Residences enables you to enjoy convenience, where everything is pretty much within walking distance or a few minutes away from the property; comfort because the project features and amenities are designed to deliver comfort at all times, which makes condo living a worthy investment; security that is 24/7 and CCTV monitoring, which makes the residents safe and secure within the property.
In line with Vista Residences’ thrust to offer convenience among its residents, it also features an AllDay Convenience Store and Coffee Project in all its projects.
For more information on Vista Residences, email [email protected], follow @VistaResidencesOfficial on Facebook, Twitter, Instagram, and YouTube, or call the Marketing Office at 0999 886 4262 / 0917 582 5167.