The unexpected is bound to happen. This is practically guaranteed in life. So, what do you do when you are faced with a new financial challenge? While you might be ticking along, paying for everything you need, treating yourself to life’s luxury, and tucking a little savings away here and there. Have you thought though, if an emergency happens, how am I going to pay for it?
While we don’t often plan for large out-of-pocket expenses, they can come around very quickly. Perhaps your pet needs surgery, or something in your home breaks down, maybe you have an accident and could be off work briefly. Are you prepared for this?
Saving for an emergency is setting aside enough money to cover unexpected costs. You are safeguarding yourself for having to borrow money. But how much do you need? You would just as easily answer “how long is a piece of string?”. While there is not a magic number that you need to save towards or set aside, simply starting can put you ahead.
Saving $25 a week can add up to $1,300 in a year. Now this might not seem like a huge figure, but it should be able to buy you a little breathing room to figure out ‘what next’. Planning for a longer-term strategy can require a little more work though.
Figuring out how much you could need to take care of your family if you were off work for a month will require you sitting down and looking at your expenses. Once you have those in order, you can figure out how much you would need, and how much you need to save to get there. While it would be nice to not affect your general living standards, sometimes by saving a greater amount over a shorter period can prove to be more beneficial. You will reach your savings goal quicker, which means you can not only resume your typical spending habits faster, but also be covered sooner.
Our biggest tips for reaching these emergency funding goals are pretty straight forward:
Want to be even more proactive? There are plenty of measures you can take to help safeguard your future and your family’s. Speaking with a professional to walk you through these options and provide guidance on how to achieve your goals can help you get there faster.
Begin your journey to financial security with Capita today. Talk to us now.