As the old saying goes, you need to save up for the rainy days. However, saving up and building your emergency fund may prove to be a difficult feat, especially if you only have enough income to cover all your expenses. There are instances wherein you may need to resort to other means to generate the funds you need in case of an emergency.
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Some people tend to look into the possibility of taking out a loan for an immediate need and use their car as a collateral, such as in a car title loan. The Los Angeles finance lenders often approve of are those from car owners whose vehicles are still in good condition.. There is also a credit criteria which they use to gauge the borrower’s paying capacity. While loans, including a car title loan is one efficient way to immediately secure the cash that you need, building up your own emergency fund is still the best. Thereby, here are some practical ways to save up for an emergency fund.
Pay yourself first
Paying yourself first simply means that you set aside a certain amount of money for your savings before budgeting the rest of your income for other expenses. No matter how small or big you decide to set aside, the key thing is that you do it primarily and consistently. This is because it is definitely harder to save if you first set a budget for all your other expenses. More often than not, there will no longer be any money left to save.
Forget your savings
Another popular saying is that the money you don’t see is money you don’t spend. Thereby, intentionally forget that you have money saved for the rainy days. You can do this by opening up another bank account that is just dedicated to your savings and leaving the passbook or ATM of this account in a safe place.
Live below your means
Building up an emergency fund entails the need for a few sacrifices such as living within, and even below your means. While it is great to dine out every once in a while, switch up your weekly take outs to home-cooked meals to save up some extra food budget to be put in your emergency fund. In parallel, it may be a good exercise to walk down a few blocks instead of having to take your car to save up on gas, with the extra money directly going to your emergency fund. In addition to this, it will be best if you can resist the urge to spend any extra money that comes in such as bonuses or an increase because of promotion. It is best to allot this money on your emergency fund until such time that you are already able to hit your goal.
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Saving up and building an emergency fund is essential in times of mishaps and unforeseen circumstances. While starting to save and consistently build it up may prove to be challenging, you are sure to overcome this with the right discipline and necessary sacrifices. Rest assured that an emergency fund will surely pay off in the long run.