You never know what will happened in the future. That's why we need an emergency fund to cover the unexpected (and could be use for the expected need too). If you don't have any emergency fund, don't panic. You could start it in a simple steps:
- Check your expenses
Calculate how much you spend every month to know how much you need to save. Check the past four months of bills to get a monthly average of your expenses.
- Measure your need
The emergency fund should be at least three to six months of living expenses. You can suit it with your need. But remember, the emergency fund should not always for you, sometimes your parent or grownup child would need your help through financial crisis too.
- Build it up
Starting won't be easy but it's necessary to start as soon as possible.
- Keep It
You've built the emergency fund over the year and build wealth in the same time. As form of saving, you can use it for some big life event such as buying new house. But remember, don't use it for the regular spending! Because you'd drained the fund eventually.