No Emergency Plan
You never know what’s coming up around the corner. Even if you feel financially secure now, in a few months’ time, you may be having greater difficulty making ends meet. For this reason, it’s vital to make sure that you have a structure in place to deal with such an eventuality. One method to secure your future is to have an emergency plan, which will allow you some financial breathing space and give you something to fall back on, should you need to.
Emergency Plan Targets
The first process of making an emergency plan is to work out how much you’re going to need. This will give you a target to aim for and make the process of saving seem more relevant. You’ll want your emergency plan to cover you for around six months, so consider your the costs of your current lifestyle over a single month and multiply this figure by six. This figure could end up sounding quite high, maybe even more than half your current salary, however, it’s vital to save during the good times to ensure that your future is secure. You might not need your emergency in the next year, or even the next 20 years, however, when you do need it, it will be there.
Saving up For An Emergency Plan
Saving for an emergency loan needn’t be arduous. You can start by going through your old stuff and trying to make a bit of money out of the stuff you don’t want anymore. You could try putting an advert in your local newspaper or setting up at a carboot sale, however, the simplest way to get rid of your unwanted goods is online. Selling your things on the internet is cheap and easy, and it offers you the advantage of reaching more potential customers.
It’s also a good idea to create a direct debit that pays directly from your monthly salary straight into a new savings account, one specially set up for your emergency plan. This will make the process of saving automatic, so you don’t have to think of transferring funds manually, which can be a pain. Any money that you make from selling your old stuff should go straight into this savings account too.
As you’re going to be living on slightly less every month, it’s important to tone down your lifestyle costs slightly. Make sure that you cut out unnecessary spending, like driving to places when you could walk or cycle, and try to conserve energy in your house, if you’re cold leave the heating thermostat where it is and put on a jumper, this will help to cut down the cost of your energy bill.
The time it takes to save up for an emergency loan depends entirely on you, however, it’s best to try to do it as quickly as possible, without putting yourself under too much strain in the process. Ultimately, tightening your belt a little in order to save up for an emergency loan will be well worth the hassle when you have the peace of mind of safety fund. Plan to succeed with an emergency plan