Rebuilding Your Emergency Fund

Podcast Transcription 

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Hi everyone, welcome to another episode of PFCU’s Money Talk Podcast. In this episode, we are going to do a very quick and easy step-by-step guide on building or rebuilding your emergency fund. In uncertain times having a solid financial safety net is more crucial than ever. We’re going to explore the steps and strategies that can not only help you recover in these uncertain times but also strengthen financial cushion, providing you with peace of mind and security in the face of any future and unknown challenges.

Step number 1 is to determine your emergency fund amount if you have not already. Your emergency fund should have anywhere from 3 - 6 months’ worth of your living expenses. Take some time and calculate how much you spend each month to come up with a good number. Some situations might require more and some less. It is important to assess your lifestyle and decide on the best number for you. So, this will give you that security for any emergencies that might come up or any income loss so you can still pay for your expenses.

Step number 2 is to make a budget. If you do not already have a budget, now is a good time to make one. There are countless good budgeting apps out there and many of them are completely free. Having a budget helps you to visualize your expenses and figure out where you can save.

Step number 3, find expenses to cut. In order to rebuild (or build) your emergency fund, you’re going to have to cut out some expenses. Now, this might look like only getting coffee once a week compared to 4 times a week. You could also make extra money by selling some of your belongings. Go through your closet and sell clothes that you don’t need or don’t wear anymore. You can save on groceries by meal planning. There are so many ways you can save and if you need any good ideas, just get online and start researching different ways that you can cut back on your expenses. A lot of them you may have not even thought of before.

Step number 4 is to make consistent contributions. Set a monthly or even weekly savings goal and get that amount automatically transferred to your emergency fund each month or week. So instead of having to go and manually do that in your account, you can have that money automatically go you’re your emergency fund account. By making consistent and automatic contributions, you won’t be tempted to spend your savings on anything else. Make sure to keep that fund separate from your spending money.

Good luck and happy saving!

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