One of the best financial decisions—and actions—you can make is to establish an emergency fund in case something unpredictable happens. Unpredictable things happen all of the time. Flat tire on the highway, unforeseen medical bills, losing your job, or an emergency trip across the country to see loved ones.
While frightening and realistic possibilities that are not uncommon. Having an emergency savings fund will bring you peace of mind because you will know that no matter what happens, you’re covered, and you won’t be stressed out trying to figure out where the money will come from.
With help from MoneyLion, you can rest assured using tips for our guide on how to create an emergency savings fund.
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Starting your emergency savings fund journey
Once you set up the emergency savings account—and it should be in a place where you won’t be tempted to touch it except in an emergency—then there are several ways to find chunks of money here and there that you can stick in the account and never miss.
Need a place to deposit your savings? Sign up for a MoneyLion RoarMoney account and set up a MoneyLion Safety Net account by linking a direct deposit to grow your emergency savings fund or rainy day account.
Set a goal and work towards it
A lot of people live paycheck to paycheck, which makes it seemingly impossible to save money for an emergency. Ideally, your emergency savings fund will cover you for six months to a year, but start small.
Start with a low goal, such as $200. You can reach that in two months if you put $50 from your biweekly paycheck in. If you have no problem staying afloat after two months, consider raising the contribution.
Setting up an automatic deposit from your paycheck into your emergency savings fund is a great way to put the money out of mind. With our Safety Net feature, you can set up a direct deposit when you have an active RoarMoney account. At any time, log into your mobile app and view all available emergency savings funds between your bank account, Instacash, and Credit Builder Loans.
Keep it accessible
If you find yourself in an emergency, then you may need cash ASAP. Therefore, the money needs to be in an accessible place, not an account in which a transfer will take several days to go through. MoneyLions suite of financial tools can get you the money you need instantly using our 0% cash advances. Pay a small turbo fee and get up to $250 Instacash or use your MoneyLion Debit Mastercard for everyday purchases. Emergency money should be liquid—cash—so you can grab it right away.
Check out these 7 ways to stop spending and create your emergency savings fund.
7 ways to avoid frivolous expenses
Pack lunch and eat out less
These two tips should be straightforward, but without planning and preparation, you’ll likely fall off track. Make time in your weekly calendar to find recipes you’ll enjoy, go grocery shopping and meal prep. Mix things up and find fun new recipes that will keep you excited about brown-bagging your lunch at work.
Don’t spend your bonus
It’s tempting to take that well-deserved money and spoil yourself. Although splurging is necessary sometimes practice self care, often times you end up spending more than your bonus. Consider saving 50% of your bonus and applying the remaining amount towards your emergency savings fund.
Turn off the lights
What sounds like a simple fix is easily forgotten and overseen. According to this study, if you use 10 incandescent bulbs for 1 hour a day, you could be wasting $24 on your lighting bills every year. Although that doesn’t sound like a lot, that’s assuming you only use each lightbulb for 1 hour a day. Additionally, this only accounts for 10 percent of your electric bill!
Find better deals
When buying an item, such as a television or new furniture, shop around. Look on Facebook marketplace, check out resale shops, or daily deals online. Set a budget amount you’d like to spend and try to spend 10% less. Begin browsing and see what is the going rate for the item you’d like to buy. You might have to wait until a holiday or keep a close on a listing. Once you snag a deal, stick the savings in the emergency savings fund.
Bundle up insurance
Shop for better deals on home and car insurance. You can browse online or call your local insurance person to help you find the best bundle deal. Additionally, if you can afford it you can pay your premium upfront for the year or quarterly to save some cash.
Want to maximize your savings? Throw your cash savings into a MoneyLion investment account and watch your portfolio grow–starting with as little as $5!
Join Honey coupon extension
Add the Honey coupon extension to your browser or download it on your smartphone. When you go to checkout, Honey will automatically search for coupons to apply. You’ll save waste time searching for deals and sighing up for junk emails.
Reduce credit card spending and save on interest
Pay your monthly bills off in full to avoid paying interest on your credit card bills. Form good habits and use credit cards on only what you can actually afford.
Also, call up your credit card company and ask for an interest rate reduction. Watch these extra savings build up in the bank and you’ll never miss buying those extra pair of shoes. Savings are just one phone call away!
One-stop financial safety net with MoneyLion
Putting these emergency savings funds strategies will help create a sense of security and help give you the financial cushion when you need it most. To maximize your financial security blanket, considering opening a MoneyLion investment account!
With as little as $5, you can start your investing journey with auto-investing and effortlessly grow your portfolio. From casual investing to a more aggressive approach, we have the experience and expertise to help you build your financial future!