Like what Forrest Gump’s famous line says, life is indeed like a box of chocolates, you never know what you’re gonna get.  You may be contented with your life now, with a stable job, a roof under your head, you are able to pay all the bills with your salary plus extra money to provide for your leisure needs, the next day you find yourself fired for whatever reasons, and you find yourself looking for something to pawn or sell, just to be able to buy food and pay your bills, because you have forgotten to save.  Let’s face reality, this do happen.

Emergency funds are a total necessity for financial security because they give you funds to fall back on in case you become ill or disabled and can’t work, or if you or your spouse lose your job, incur large medical bills, or have an unexpected large bill such as school expenses and a major car or home repair.

When I have exceeded my own emergency fund saving goals this year, I invested the excess funds on real estate using it for downpayment. I have $500 left in my emergency fund savings account and I’d like to double that before the second quarter of this year ends. So that’s a goal of $1,000 on my emergency fund savings account by June, 2007.  

Financial management experts say that, if you do not have money saved that is equal to three to six months worth of basic living expenses, depending on your lifestyle, then you are definitely living on the edge.  There’s no time like the present to get started. 

To be able to build an emergency fund, you will need to know how to save.  Your success in building an emergency fund depends on discipline.  You need to learn to be consistent in putting money on your account, on a regular basis.  You also need to be able to resist the need to get money from your emergency funds for non-emergency reasons.

The following are some helpful tips I have learned to get you started saving to be able to build your emergency funds:

You will need to make a decision on the percentage of your gross income to allocate as savings. 10% of your salary is a good starting point, but if you believe that you cannot set aside 10% of your salary, you can start from 5% until you can come up with some adjustments to your budget so that you can set aside a larger percentage of your salary to your savings.

Have a written budget - this will track down all your expenses.  Whether you make a lot of money or not, you need a budget.  Being able to track down your spending means you are able to cut back on unnecessary expenses. 

Do not buy expensive items on impulse; think it over for at least a day or 30 days.  If you’re forced to dip into your savings for an emergency, consider it a loan which must be paid back in a reasonable period of time, and set up a repayment schedule.

With regard to savings on food, eat out one fewer time each month or only when the budget permits, bring lunch to work and when buying grocery items, make a list and stick to it.

Whenever you receive unexpected money, such as cash bonuses, tax refunds, salary increases, overtime pay, and other extra income put all or if not most of it into your emergency funds savings.

But do you know what is my favorite way to save more money? Taking another job! I’m a freelance web content writer and freelancing gives me the freedom to make time to do other jobs that will provide me extra money.

All of my web content writing gigs’ payout goes to my bills. Now that my bills went up to almost 200% because of the monthly amortization of the real estate I invested on, I definitely need to grab more of the money making opportunities available.

Next is how I currently make money and my other projects that will eventually make me more money for me to afford to finish paying the real estate a lot earlier.

Care to join me in this challenge to double my emergency fund until next month?

[image from 0xDE]