The economy’s inflationary trend is putting a squeeze on the possibility of creating a safety net of savings. Notwithstanding efforts to combat inflation, prices continue to escalate.
But, it’s possible to pad your emergency fund with some basic planning. Here’s what you can do:
- Itemize your expenses
Know your monthly outgoings by listing them out, advises financial advisor Lori Gross. This process will give you a clear view of how much you can save for emergencies. The amount of emergency savings you need can vary, but a good rule of thumb is to have three to twelve months of living expenses saved up.
2. Prioritize consistent saving
Build your emergency fund with regular deposits. Sam Waltman, a wealth advisor, suggests treating a fixed amount of your income as a compulsory saving deposit and arranging for it to automatically go into a dedicated savings account.
