Emergency funds can help to alleviate stress when the unexpected arises. Anything can transpire at any time and most of us have experienced the “life happens” scenario.
Are you longing to start your own small business and would like to pursue your dreams?
Having an emergency fund can allow you to pursue those dreams, be prepared for the unexpected, and lighten the blow of life’s happenings.
Creating this fund starts with setting a goal, determining how you get there, and then tracking your progress.
Having the freedom to pursue your dreams is priceless; whether it is to fund the actual start-up cost, fund a day’s pay if you have to take time off from work, or pay for marketing or networking opportunities while your company is still new.
To start saving for your “Dream Emergency Fund”; set a goal. How much money is needed for this fund?
Say your objective is to purchase office equipment for your new business such as a computer, a printer and internet connection; your dream fund target should start with the total amount needed for these items.
Unexpected things such as a premature death can happen to anyone.
We are not only caught off guard by our loved one’s sudden departure, we are also blindsided financially.
We think there is time later to plan for this part of life, but then it is too late and the event has already happened.
Now that you have set a goal, it is time to determine how you go about achieving that goal.
If the savings goal for unexpected things is to have at least $500 saved in a year’s time, then it is necessary to determine how much you need to contribute monthly to that fund.
As I stated earlier, life happens.
Divorce, job loss, medical issues, and more are major life changes we may experience. It does not matter if you were married for two years or 20 years; if you get a divorce, your lifestyle is going to change.
You were a couple, now you are single. Your household income was times two, now it is one. Similarly, losing a job can have the same effects as this is also a loss of income.
It does not matter exactly which life changing event occurs in your world, just know that when it does, things will be easier when you are financially prepared.
To plan for financial mishaps or adventures, you should set a goal of how much you want to save.
For example, I need to save $1,000 to start my business.
Then periodically check your progress and make adjustments. You may find that you are able to increase your monthly contributions to $90 a month instead of the designated $83 which will allow you to reach your goal faster.
Setting goals, determining how you will get there, and tracking your progress along the way will definitely allow you to start and maintain that emergency fund for your dreams, unexpected events, or life’s happenings.