Having an emergency fund is actually something that you can say is a must-have. Unfortunately, not everyone can have an emergency fund.
The most common reason why people can’t have an emergency fund even though they are already earning is because they don’t have enough money to set aside as an emergency fund. Income is always just right or even less to meet today’s needs.
Do you also have such problem? It’s always difficult to allocate part of the income to an emergency fund. You give up and choose not to set up an emergency fund at all.
In fact, you can’t just give up and just give up. It is still very possible for you to prepare an emergency fund from now on.
Here are some ways you can take to start setting up an emergency fund with a mediocre income. Don’t let you regret behind your back for not starting to prepare an emergency fund from now on.
If your income this month is very suitable to meet your needs, we can start preparing an emergency fund with only the items you have. Yes, try to pick and choose which items you don’t need and can be sold.
If you are confused about which item to sell, there is a trick. Imagine you are in an emergency situation and really need money, which one are you going to sell.
Why should it be sold now? You’ll most likely get a better price for not being in too much of a rush. If you sell it later when it’s urgent, it will probably be cheaper.
To make you more disciplined and committed to starting an emergency fund, you can set a target of at least succeeding in selling one to two items per week. Remember that the sales proceeds must go into your emergency fund savings.
Don’t be shy to bid
Press your expenses by not being shy about negotiating or bidding every time you buy an item. It’s not all negotiable, but when the opportunity arises, it must be done.
You don’t have to get a lot of relief, just getting a few thousand discounts is enough. That small amount will eventually affect the growth of your emergency fund.
Some of the services that you can negotiate with are internet and cable TV services, telephone service, the cost of renting a house or residence, and so on. For internet companies or the like, they will usually have some cheaper plans for customers.
In terms of rental costs, you must be good at finding win-win solutions so you can reduce rental costs but not harm property owners.
Doing ‘spending tires’
If you really need emergency funds in the near future, the quickest and most effective way is to do a spending ban. It is a way in which you will not spend money on things beyond the most basic needs.
You can do this for a week, a month, or even a year. It all depends on your need for an emergency fund.
Doing this will give you the flexibility to use your existing money as an emergency fund without having to ignore the most basic expenses. You only have to reduce expenses for things that are not too emergency.
Still confused about how to do it? At the beginning of the month you should have decided on the most basic needs that should not be ignored. For example, the cost of renting a place to live, electricity, food, installments, and health costs.
You may not spend money on other costs other than those already mentioned. Do not let you violate your own commitment, especially if you still give a little freedom to use money outside of basic needs.
At first it may feel very heavy and you want to give up but at the end of the month you will feel more relieved and satisfied. You will have enough money to go into an emergency fund so you feel more at ease.
Hiding money from yourself
The theory is that you’ll spend less money if you don’t know you have the money or don’t know where the money is. It’s the same as you won’t be so eager to eat ice cream if you don’t know where the ice cream seller is.
So how do you hide money from yourself? Can it? Of course you can with creative calculations. You can take a few hundred thousand to put into a checking account.
That ‘ghost savings’ will make you feel poorer than you need to be. For example, you feel that you only have Rp. 1 million when you actually have Rp. 1.5 million.
Within a certain period of time, you can put the money in the invisible savings into an emergency fund. This method might not work for some types of people but if you’ve never tried it, why not try it now?
Doing extra work
This method is quite popular. People choose to do additional work, for example as a freelancer or part-timer to increase their income.
All of this income will not be used to finance daily needs but will go directly to an emergency fund. This method is suitable because there are currently a lot of jobs that can be done with flexible working hours and can be done at home.
All of the methods mentioned above can successfully help you set up an emergency fund quickly as long as you are disciplined and willing to commit. If you give yourself a little leeway, all plans can go awry.