How to build an emergency savings fund

An emergency savings fund is essential to ease your stress when unexpected expenses arise that you may not be prepared for. Let's face it, sometimes 'life happens' and we can't plan for the unexpected but we can be prepared, just in case it does. If your emergency fund turns into a holiday fund or a retirement fund, then so be it!

Read on to find out more about how building an emergency savings fund should be at the top of your financial to-do list for 2020.

How much is enough?

Financial planners recommend that saving three to six months' worth of monthly expenses is sufficient. It sounds like a large amount but you need to get started by saving a little each month. 

Plan where you can cut back

Print out your latest bank statement and highlight the areas where you think you can cut back and put these extra amounts into a savings account. Save at the beginning of each month to avoid over-spending on unnecessary goods.

Review all your insurance policies

Schedule some time off to see if you can get a better rate on your short term insurance monthly payments. Chat to a broker who can offer you sound financial advice on insurance that can protect your income or secure your retirement.

Tax Benefits

Consult with your tax practitioner as to where you can better claim and structure your tax submissions. Keep a record of all your business expenses and take out a tax-deductible retirement annuity. This will also add savings to your long-term retirement goals. 

Downgrade your Car

Weigh up the pros and cons of driving an expensive car. We love our car status in Johannesburg but is it really worth the high repayments? Or the insurance and expensive petrol bills? Relook at your values and compromise today for a more comfortable future.

'Being frugal does not mean being cheap! It means being economical and avoiding waste.' - Catherine Pulsifer

There are many reasons why you and your family need to plan for the unexpected. Medical emergencies, house repairs, auto repairs, and retirement are a few reasons for having an emergency fund. Start preparing now, you can look forward to the pot of gold at the end of the rainbow.

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Why is living in Douglasdale so attractive? - By Tracy Thompson