An emergency fund is a fund that we have prepared in advance with a certain amount that we prepare or will use in the event of unexpected circumstances, such as floods, earthquakes, etc. From the description of emergency funds above, there is a certain amount that we have prepared which of course will be different for each person, but we can determine the ideal amount of emergency funds as follows:
Single (no children): 8X average monthly expenses.
Family (no children): 12X average monthly expenses
Family (with children): 18X average monthly expenses
For many people, saving emergency funds is not easy, it requires determination and a strong will, apart from that we also need a strategy or method. Here are some ways to save emergency funds:
1. Record every expense and add it up every month for at least 3 months. Calculate your average monthly expenses.
2. Determine the ideal amount of emergency funds according to the formula above
Example: If you are a single person who has a total income of $1000, and average monthly expenses of $800, then the ideal amount of emergency fund is $6,400.
3. Determine the percentage to allocate monthly income to an emergency fund, for example 10%, meaning $100, which means it will take you 64 months to reach your ideal emergency fund.
4. Manage your finances strictly, and if possible build a side hustle, so that your needs every month can be met well.
5. Act more efficiently, get rid of unnecessary expenses, and be more disciplined.
Single (no children): 8X average monthly expenses.
Family (no children): 12X average monthly expenses
Family (with children): 18X average monthly expenses
For many people, saving emergency funds is not easy, it requires determination and a strong will, apart from that we also need a strategy or method. Here are some ways to save emergency funds:
1. Record every expense and add it up every month for at least 3 months. Calculate your average monthly expenses.
2. Determine the ideal amount of emergency funds according to the formula above
Example: If you are a single person who has a total income of $1000, and average monthly expenses of $800, then the ideal amount of emergency fund is $6,400.
3. Determine the percentage to allocate monthly income to an emergency fund, for example 10%, meaning $100, which means it will take you 64 months to reach your ideal emergency fund.
4. Manage your finances strictly, and if possible build a side hustle, so that your needs every month can be met well.
5. Act more efficiently, get rid of unnecessary expenses, and be more disciplined.
