Emergency fund is one of the most essential components in our financial portfolio and it we lose our job or other primary source of income, we should be able maintain our lifestyle for at least 6 months. In fact, by being thrifty and cut all the unnecessary costs, the same amount of fund can extend to 8 months or more. Because emergency fund is essential, we should build one today. We should start by saving a small amount today, even if it’s only a few dollars. We should be able to do this, even with a tight budget. The small amount of money that we save should add up over time and there are many things we can do to save a little. We may bring a lunchbox from home and eat it at the workplace, while a small thermos of homebrew coffee should be a good replacement for those cups of expensive Starbucks coffee. By skipping some eating out sessions, we should be able to save nearly $200 a month, which we can use to build the emergency fund.

Things are easier to do in groups and we should search the local savings club if they are present in our area. The task is also even easier if we use the automatic deposit feature, which is transferred from our monthly salary. This means that we won’t spend money that we can’t even touch. When emergency situation does occur, we will be thankful that we have done such precaution. The trick is don’t count the money that we save each month, just realize that somewhere out there, a pile of money accumulating to protect us during possible difficult times. The traditional saving method should also help. At the end of the day, we should empty our purse, wallet and pockets for changes and $1 bills. Put them all in the saving jar and if we have the transparent jar, we see how it is filled very quickly. In just a year, we may have a few full saving jars that can be used to purchase essential things. We won’t miss those changes and $1 bills, but at the end of the year, we may potentially get an extra $1,000 for a more enjoyable holiday season, without taking anything from the savings account. Everyone will love this simple activity and they will be more eager to save.

If we want to go outside to exercise or not planning to buy anything, we shouldn’t bring any cash at all. We could bring a bottle of water in our bag and freshly cut apple for snack. This will prevent us to buy that $5 sandwich and the accompanying soft drinks. If we don’t have an emergency fund yet, it is time to be cheapskate and we shouldn’t go to places where people typically tip the waitress. Again, it is better and cheaper to bring a lunchbox from home. We may eat it in the car, if we are a bit embarrassed about it.

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