Starting an Emergency Fund

Life is full of unexpected surprises, many of which cost money. When people live paycheck to paycheck without any savings, they’re at the mercy of any small crises. Sometimes a tiny problem becomes a huge one because the victim wasn't prepared for possible trouble.

How to Start an Emergency Fund
Starting an emergency fund is not difficult. Anyone can do it. Here's how:

Set money aside in a safe place or in an account that is specifically for your emergency fund.  Consider not carrying a debit card that is tied to your emergency fund. You'll still have access to the cash when you need it, but you're more likely to consider your actions before making a withdrawal.

Build a buffer. If your budget is tight, start small. Set aside as much as you can to deal with small unexpected expenses. Over time, work to build your emergency fund bigger and bigger.

Resist temptation. When you have a big chunk of change sitting in the bank unused, it can be tempting to use it for other things. Resist the urge. Use your emergency fund only for emergencies, otherwise you defeat the purpose.

Finally, set a goal for yourself. How much money do you need in emergency funds to help you sleep better at night? Work to build your emergency fund to the amount of the goal you've set.