How to Save For a Family Emergency Fund

• First Thing You Need to Do is Get Started. Too many people keep delaying their emergency fund planning because they don't have enough to start with. It doesn't matter whether you want to start with $20 or $2,000, open a saving account and put this money in. Worry about funding it later, just get it started and you'll soon notice how you could find new ways to save and put money is your emergency fund.


• Treat it Like Any Other Regular Bill. The number one reason why emergency fund is not funded is because it doesn't feel important on a daily or monthly basis. If you treat it like a monthly bill, it will be taken care of. If you fear that you may not have money left for it or you may forget funding it, you may even have it directly taken out of your paycheck and deposited to a saving account. In this way, you never see this money so you can't spend it on anything else.


• Not Enough Money. this is the number one complain or excuse from most people for not having their emergency funds. What they don't realize is that they are spending money on things they could easily avoid and then defer those savings to their emergency funda. For example, if you smoke or drink, you may want to consider fixing your bad habits and redirecting savings to your emergency fund. If you eat out a lot, may be you want to skip couple of times a month and put the savings in emergency fund.


• Shop Smart and Save. Shopping for groceries and regular household stuff is pretty much non-negotiable and you'll have to spend that money. However, have you ever compared prices from your favorite grocery store to other stores? You probably didn't think about it since it the same brand everyone is selling so why would it cost more or less at different stores? Technically it shouldn't but in reality it does. Here is an example. A couple of years ago a local newspaper compared weekly grocery prices from 5 different grocery chains in Columbia, SC and results were shocking. For the same grocery list with same brand items, price range for the weekly bill was from $48 to $73. Now why in the world would you pay $73 for your groceries when you could get them for $48? Shopping at a different store could have saved $25/week in this example. That would translate to $1,300/year. Wouldn't that be a decent start for your emergency fund?


• Shopping for Big Ticket Items. Your savings could be lot higher when you're purchasing a big ticket item such as a appliances or home electronics. Online retailers can usually offer you a far better prices as compared to your local store due to lower overhead costs. What you should do is to go to your local store, check out different models and when you have decided to buy a particular one, go online and compare the prices.


• Annual Bonus or Income Tax Refund. Most people make plans on how to spend this cash but very few think about emergency fund. Remember, your tax refund or bonus is usually not accounted for in your annual budget and you usually don't have any monthly expenses deferred for this. So think about saving some of it for your emergency fund before spending on that expensive vacation. If both partner work, this could add substantial funds in your emergency fund.

Where to Safely Invest Your Emergency Fund