5 Ways to Grow Your Emergency Funds
If you lost your job tomorrow for how long could you live without an income? Kevin and Bradly were both laid off from their jobs. Kevin is immediately financially destitute. While, Bradly is concerned, he knows that at least he can survive for the next 6 months’ even if he does not regain employment within that time. What made a difference? Bradly has an emergency fund; do you?
If you should lose your job in a market where so many businesses have closed either, temporarily or permanently, or will, put a freeze on hiring, how long can you remain unemployed? If you do not have at least 6 months’ emergency fund, it is critical that you immediately start building a robust emergency fund. Here are some tips to help your creative juices to flow.
1. Know How Much You Need for Sure: In normal times an emergency fund ought to be three (3) to six (6) months of your expenses. However, in this unusual time of unprecedented job losses, it would be best to aim for six (6) months or more. Therefore, if you do your budget and realise that you truly spend J$100k per month, having $600k or more in emergency funds would put you in a better position. How much more do you need in order to have at least six month’s emergency funds? Check the balances of all your accounts. If you as in the example above, you are aiming for $600k and only have $200k altogether, start saving an additional $400k is your new target.
2. Aggressively Save: Please go back to your written budget and examine every expense. Beside each one, please put the words “need” or “nice to have”. Until you have the amount you need for your emergency fund, it is best to eliminate the “nice to haves” and determine the dollar amount by which you want to reduce how much you spend on each need. We are in drastic times, please take drastic measures. Now is the time to “ban wi belly.”
3. Sell Some Stuff: Less people are buying things as they try to maintain their cash. However, some persons are buying things they need and may prefer to go the second-hand route because it is cheaper. What do you have in your home that you no longer need? Second-hand books, a crib, etc. You were kind to allow them to stay for free, but now they need to pay a storage fee. Collect them please and prepare yourself for emergencies.
4. Sell Your Talents and Services: You have been selling your talents and/services to your employer all this time. Now it is time to sell to others too. What do you have that people want? Which supermarket, pharmacy or other business would be willing to pay you to do deliveries? Do people around you need phone credit? Do you have computing skills and are able to a small business to transition to online selling? Now is the time to “tun yuh hand and mek fashion”! So if you can make a mask, make it fashionable and maybe create a matching purse and head wrap for the fashion-forward ladies. Put on your thinking cap and think, “hmm what can I do for a fee?”
5. Rescue Other People’s Money: Why is saving coins and small monetary notes far from a new idea? Because it works! When persons abandon their coins be a hero; please rescue them. Make a habit of emptying all of your change into a jar each night. It may seem small but “every mickle mek a muckle.”
Do you need help to grow your emergency funds? We have helped many people just like you. Get more information on money management at, https://bit.ly/FMSEmergency
Written by Michelle Sinclair-Doyley
Manager, Group Financial Partnership Support & Financial Education, JMMB Group