Creating an emergency fund may seem daunting for some. A lot of people may think you need to put away hundreds of dollars each week, which is delaying them from starting one. It doesn't matter how much you are putting in this account as long as you have begun.
Figure out what you can spare each pay
Crunching the numbers and working out how much you can allocate for your emergency fund will help you understand how you are spending your money. For example, James figured out that he could spare $50 from his weekly pay for his emergency fund. He worked out that if he puts aside $50 each week for one year, he could save approximately $2,600.
Starting a separate savings account for your emergency fund
By opening a second account, you can keep this money separate from your everyday expenses and preventing yourself from spending it.
Set up auto transfer on payday
By setting up a regular auto transfer, you won't have to worry about manually transferring the money into your emergency fund savings account on each payday.
Make extra contributions when you can
If you happen to receive extra money during the year, like a pay rise or tax return, consider using some of those funds to boost your emergency fund.
We hope these tips help you in starting your emergency fund or improving it. For more information, please visit https://moneysmart.gov.au