64% of Canadians have an emergency fund to cover three months of expenses 👏👏👏
An emergency fund is there to help when something unexpected happens – You can’t work for a period of time, get laid off, the washing machine breaks, etc.
But that means that MANY Canadians AREN’T prepared for a financial emergency.
If you fall under that 36% of people, it’s likely for one of two reasons:
- You didn’t realize how important they are (if that’s you, read this)
- You don’t have the money to make one
Most fall under the second category. And if that’s you, we have one simple change you can make to build an emergency fund when you don’t have the money.
Save once a week.
That’s the trick.
Saving once a month or taking money off of each paycheque works great when you have the money. The problem comes into play when you already KNOW things will be tight or when you’re hit with an unexpected bill.
Adding to your emergency fund will be the first thing axed because, of course, it already feels like an emergency.
If rather than saving $100 per month, we break down our savings to $25 a week, for example, it’s easier to do consistently. And, when it comes to finances, consistency is key. Most people can find $25 even on lean weeks.
Are you winging it with your finances?
There are 2 keys to making this work:
- You must automate it
Manually transferring money over gives you the option to forget and to debate whether you can this week. Do not give yourself that option. - You must put the money into a separate account
And it’s best if that’s not accessible by bank card. I chose to use a TFSA but a professional who is familiar with your situation will be able to advise best. Jen, our Money Coach, would be happy to help you with that.
Making an emergency plan when you don’t have the money can take time. So be patient with yourself. It takes time and effort to build plans like this.
But it’s worth it to know that you and your family will be taken care of.