Building An Emergency Fund Even When It Feels Impossible

While we know having an emergency fund is important, sometimes it might feel impossible to start one on a tight budget. But you don't have to feel bad or like you have no finance options to help you out. Instead, you can learn how to build an emergency fund by following a few steps to help get you started and making sure you remember that having a small emergency fund is better than nothing! Keep reading this article to learn six ways you can save for emergencies right now.

6 Ways To Build An Emergency Fund On A Very Tight Budget

1. Let Go Of Ideals

As we have already alluded to, you need to let go of experts' opinions and ideals when saving for an emergency fund on a tight budget. Your safety net can grow as large or stay as small as you'd like. Budgets fluctuate — some months you'll be able to input more than others. So, your saving/spending habits will change depending on your circumstances. Consider the smallest amount you'd need to handle a crisis, and work from there. . 

2. Set Numerous Small Savings Goals

In a similar vein to the above, you need to set yourself up for success by ensuring your initial savings goals are small. Don't aim for the elusive three months' worth of expenses right off the bat, shoot for one month (or even a week). Whatever goal makes saving seem achievable, set it. Reaching your first objective provides the motivation you need to keep going. After that, you can set your second goal higher, and then your third, and so on. Having small goals will simplify your way to larger goals. 

3. Aim For Little And Often

Don't flush a bunch of cash into your emergency fund at once — it just isn't sustainable. The whole point of an emergency fund is to give you some relief in case an emergency arises, not stress you out completely. In reality, there is nothing wrong in making your first contributions quite small. As we said in the beginning, having something in your fund is better than not having a fund at all. So if you can only set aside a few dollars, make sure you do it as often as you can so you can make it a habit.

4. Automate Your Emergency Fund Savings

Ask anybody about the easiest way to save month and they'll say this — automate contributions. Set up a new account for your emergency fund. Once you automate your contributions, all you have to do is ensure your bank sends your chosen amount into your new account automatically. For best results, make sure it goes into a savings account, so you can’t access it too easily. Otherwise, you're more likely to break and tap into the fund whenever you want to do a bit of shopping.

5. Don't Go Overboard

The next step is to remember not to go overboard. In other words, try not to put too much of your savings into an emergency fund. Of course you want to treat your emergency fund as a priority, but you have to remember that you can’t completely slash your budget to set aside money. You have other expenses you need to take care of as well. This means you could need to prioritize only your necessary expenses and then put money aside for your emergency fund.

What you can do is pick an amount of money as a goal you’d like to have in your fund. So let’s say you want at least $1,000 in your emergency fund, you can then look at your budget and see where you can cut spending without forgetting your necessary expenses. Cutting frivolous things out will only last until you’ve reached your main goal in your fund. Once you’ve reached your goal, you can ease up on not spending on frivolous things.

6. Know Your Finance Options

Despite being on a tight budget and not having your emergency fund set up yet, you do have options when emergencies crop up — some of which don't even require a good credit score! Here at Utah Title Loans Inc., we offer title loans, payday loans, and signature installment loans, giving you the ability to borrow quick money to fund medical bills, veterinary fees, home repairs, vehicle repairs, or any other emergency expense that can’t wait.

Whatever your issue, we have a finance option for you. With a title loan, you will use your car’s lien-free title as collateral. With our payday loan or signature installment loan, you don’t have to worry about having any collateral. Any of our loans can get you fast cash because the process is simple. All you have to do is go to our website and fill out the online form for the loan you want. From there, we will give you a call and help you learn more about the loan you want.

Start Building Your Emergency Fund Even With A Small Budget

Building an emergency fund won't necessarily be easy, but with the steps above, it certainly isn't impossible. And even if you make a few mistakes along the way, you can simply start afresh the next day — there's no need to let one slip up ruin your newfound saving habit. Not to mention, you can always turn to us at Utah Title Loans, Inc. to cover financial emergencies. Just complete our online form and we'll give you a call to go over your details and help you through the process.

 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.