Read This if You Want to Put Away Emergency Funds but Don’t Know Where to Start

Read This if You Want to Put Away Emergency Funds but Don’t Know Where to Start

Apr 29, 2024

You've probably heard it around a lot, but we will say it again, saving for emergencies is never not a good idea! A solid habit of building savings paves the way for financial stability. Squirreling away your emergency savings can feel a lot like trying to catch a slippery fish with your bare hands. That’s why, in this blog, we're diving deep into practical and achievable saving strategies to ensure a reliable volume of rainy day funds.

First things first, let’s understand what we mean by emergency fund. Think of it as creating a safety net, a stash of cash saving for unexpected expenses. From sudden car repairs to unexpected medical bills, having a cushion of savings can save you from sinking into debt when life throws you a curveball.

Let's talk about strategy…

How do you actually go about building this emergency fund? The first step is to understand the importance of emergency funds and the next is effective money management. It is all about consistency and discipline. Start by setting a realistic savings goal. Experts recommend putting away three to six months' worth of living expenses, but don't let that number intimidate you. Start small, with a goal of saving just Rs 500 or 1,000, and gradually work your way up from there.

Next, automate your savings…

Treat your emergency fund like a monthly bill that must be paid. It always helps to set up automatic transfers from your bank account to your savings account every payday. By making saving a habit, you'll be surprised at how quickly your emergency fund grows, equipping you with financial preparedness. 

Bonus tip: Cut unnecessary expenses. Take a hard look at your budget and identify areas where you can trim the fat. When reaching out for your wallet, ask yourself hard questions: Do I really need that or will it give me anything beyond instant gratification?. Channel that towards emergency fund allocation instead!. Remember, every rupee counts!

For those who live the paycheck to paycheck life…

Building an emergency fund might seem like an impossible dream for this lot. However, there’s no need to feel hopeless. There are still ways to start saving, even on a tight budget. Look for opportunities to increase your income, whether it's picking up a side hustle or asking for a raise at work. Whatever extra you make out of this, goes straight into your emergency savings fund.

All that extra work and no gratification? Sounds boring, we know. We recommend celebrating your progress along the way. You are saving for the future, but that does not mean you don’t reward yourself once you reach a savings target for all the hard work and discipline. Think of it as patting yourself on the back for each milestone you reach. This keeps you motivated. 

The best part is you don’t have to go this hard distance of building a habit of savings, alone! There are several apps to make this journey smoother for you! If you are a beginner and do not have much to put away towards savings right now, consider Olyv Digital Gold Savings where you can save everyday with as low as Rs 10 and build savings worth gold’s market’s prize!

Happy saving!