Want to know the best 5 tips to build emergency fund for your financial security?
Okay, so let’s say you’ve already become acquainted with the idea of having an emergency fund.
You know you need it.
You know you should get started saving for it.
You know how to get started, but you just can’t bring yourself to the idea of doing it.
I know exactly what you’re going through. Personally, when I first started saving up for my emergency fund, it was tough. (I even regressed a few times!)
Let’s face it: saving money has a negative connotation attached to it due to its relation with the idea of persistence, diligence and hard work.
And come on, who here really wants to “work hard”, right? 🙂 Obviously, we want things to be as easy as possible. This way, we can continue to do more of what we’re doing because it’s easy to do.
Luckily for you, here at The Wise Living, we teach you effortless ways to put money towards your emergency fund savings. We call it ways into “tricking yourself” into saving money.
5 Emergency Fund Saving Tips For Millennials
Here are 5 easy money-saving tips you can do when you want to start building your emergency fund.
Let’s get started.
1. Small is the way to go.
This one’s easy — just make sure you always have whole bills with you when you’re transacting using cash.
Carry whole bills with you so that you will always get change. Never spend your change, only use whole bills in every transaction you make.
For example, whenever we get gas for our car, we always put ₱700 every transaction.
Then, when we receive the ₱300-change, we don’t spend it. Instead, I put it in a separate envelope marked “savings”.
Another example is when we go to coffee shops to work or to reward ourselves with a nice treat.
Personally, I use ₱500-bills for this, so that whenever I receive the ₱200-change for my tea lattes, I place the change in a separate envelope marked “savings fund”.
You can do this, too. At the end of the day, collect all the change that you have.
Then, deposit them to your emergency fund every 15th of the month.
You can think of it as giving yourself a personal salary!
2. Go automatic!
Obviously, we can’t trust ourselves to pay ourselves first.
I’m guilty of this, especially when I first started saving. Before I’d receive my sweldo, I would tell myself that today is the day that I’ll finally add money to my savings account.
But then I would flake and spend my excess money on food, gourmet beverages or Lead CDs.
Just the thought of a new salary can test even those with the most disciplined minds.
That’s why we should set up automatic savings instead — let our bank do the saving for us.
In my latest book, #AdultingAccomplice, I talk about this money-saving trick in more detail. Usually, most banks offer an automatic savings system now, so you can take advantage of them easily.
For example, every 13th and 26th days of the month, my friend has set up an automatic fund transfers that deducts ₱600 from her payroll and transfers to her emergency savings account automatically.
I used to do this with BPI back then, but I’m sure other banks in the Philippines can help you do this for free, too.
3. Earn from your hobby.
Yes, I know I’ve said “easy” in the title. 🙂
That’s why instead of forcing yourself to do another task you don’t like, think of it as hitting two birds with one stone — you get to work on your hobby (writing, photography, baking, tutoring…) and earn a side income as well.
Since my weekdays are for working as a content marketing team lead for an international company, I spend my weekends building another passion project of mine. Don’t get me wrong — I love my work right now, it’s actually my dream job! But I also find it rewarding to build another side hustle. #workfromanywhere
I’m confident that over time, these projects can be great income streams so I can allot a portion of their revenue towards my security fund.
You can apply the same thinking when it comes to earning from your side income.
Do you like baking? Start selling your pastries on Instagram.
Are you a fan of desk tours or studygram accounts? You can build a productivity-centered website and earn money from affiliate marketing.
Is photography your passion? You can offering your photography services on Facebook groups so you can build your portfolio from scratch.
Main take-away? It’s easier to save money for your security fund if you’re incredibly passionate about the work you’re doing.
4. Name your savings accounts.
Naming your bank accounts gives you a psychological advantage. It makes you feel more focused towards your dreams since you see them every time you check on your bank online.
This money-saving hack is super helpful to me in building my emergency fund. When I first started saving, I had these names for my bank accounts:
- Bills only
- Korea 2017 travel (which evolved into Korea 2018, Korea 2019, Korea 2020…)
- Ading’s education
- Safety fund so my loved ones are okay (which was my emergency fund’s name)
All of these goals are very important to me, so I worked hard on allocating my income and adding money to them. Now, I can tell you with complete certainty that I’m glad I did. 🙂
5. Make a disaster board.
Ever heard of a vision board wherein you post the pictures of your dreams to inspire you?
This one’s the opposite.
I want you to find pictures of possible emergencies: a hospital bed, an ambulance, a broken laptop, a burnt home, a flooded condo…the only limit is your imagination. Whenever you see this disaster board, I am positive you’ll be feeling the sense of urgency and starting to save more. 🙂
Bonus: make a safety mood board.
The tip about disaster boards may not work for you if you’re passionate about manifesting, and you don’t want to manifest any emergencies, right?
If you feel the same way, you can make a safety mood board — or safety affirmation board as your inspiration. It looks something like this:
After I made this inspirational savings mood board, I made it my computer’s desktop wallpaper. It helps me become more intentional with the way I handle and save my income every end of the month.
Remember, no one’s paying you first, so you owe it to yourself, right?
Loved this post? You may also like this next post on how you can save money as a millennial for more tips on how you can money to your savings accounts.