I had a bit of a financial shock recently when our HVAC system went out in the middle of a hot summer! This refocused me on the importance of having an emergency fund. You want to be able to sell assets on your own terms, not when forced to! Here are 3 quick and easy ways to build an emergency fund:
Acorns automatically rounds up your purchases and invests the change. With almost no effort on my part and after time a $1,000 popped up in there. All from investing change automatically. It would be better if this stayed invested, but also makes a nice “Oh shit, the car broke down fund!”
2. Everything Breaks, make a list
After the HVAC, I made a list of about 5 things that will probably need repair or replacement in the next 5 years. This practice sharpened my mind and focused my intentions. It prompted me to put off some purchases and save the extra cash for the foreseeable “emergencies”.
3. Cut back
This exercise prompted me to once again look through the budget and find things to cut. Un used subscriptions, un used gym memberships, recurring bills that we forgot about. Cut them and use that money to prepare for future repairs! It also made me think harder about “nice to have” purchases. Are they truly value added?
”Emergencies” will happen, so there is no excuse to call them unexpected. Prepare in little ways now!