Having an emergency fund is one of the main foundations of personal financial planning. Unfortunately, many people underestimate the importance of this fund. In fact, an emergency fund is a sum of money specifically set aside to deal with unexpected situations, such as job loss, accidents, or urgent medical needs.
An emergency fund can be a lifesaver at crucial times. But before you can enjoy it, you need to know how to collect an effective and realistic emergency fund.
In this article, we will discuss practical steps that you can immediately apply regardless of your current income condition. Because building an emergency fund is not just about a large amount, but about the right habits and strategies. Let’s get to know the six ways to collect emergency funds that are most suitable for you, before the urgent situation comes without warning!
1. Set an Emergency Fund Target
The first step of how to collect emergency funds that you must do is to determine the amount of emergency funds needed. Generally, an emergency fund should ideally cover living expenses for 3 to 6 months. For example, if your monthly expenses are around Rp5 million, then the emergency fund target should be in the range of Rp15-30 million.
Adjust this target with your financial condition and dependents. If you are single and have no installments, 3 months of funds may be enough. But if you are married or have more dependents, you should prepare funds for up to 6 months of regular expenses.
2. Open a Special Account for Emergency Fund
In order not to mix emergency funds with savings or funds for daily needs, you should keep it in a separate account. This method will help you control the use and monitor the growth of funds more focused. This is also one of the most commonly used ways to accumulate emergency funds.
Choose an account with competitive interest rates and no administration fees. Alternatively, you can also save your emergency fund in digital gold, which is more stable and easy to withdraw when needed.
3. Set aside Regularly from Income
Saving money does not have to wait for the rest of your income, it should be a top priority. One of the most effective ways to collect emergency funds is to immediately set aside a portion of your income every payday, not after all needs are met.
You can start with a small amount, for example 10% of your salary. To make it easier and more consistent, activate the auto-debit feature to your emergency fund account. Remember, consistency is more important than a large amount at once.
4. Reduce Unnecessary Expenses
Managing your expenses is an important step in building your emergency fund. Conduct a monthly evaluation to find out which expenses can be reduced, such as subscriptions that are rarely used, excessive hanging out, or impulse shopping.
Funds that were previously used for these things can be directly transferred to the emergency fund account. You don’t have to cut everything at once, just do it gradually to keep it comfortable.
5. Utilize Additional Income
If your main income is not enough to set aside an emergency fund, try to earn extra income. This is a way to collect emergency funds quickly enough to accelerate the achievement of the fund target.
You can try various ways, such as freelancing, selling online, or becoming a content creator. In the digital era, opportunities to increase income are very diverse. Any additional income can be directly allocated specifically for emergency funds.
6. Save in Assets that are Easy to Disburse
In addition to the amount of funds, it is also important to pay attention to where you store your emergency funds. These funds must be easily accessible whenever needed, without complicated disbursement processes or adverse deductions.
Choose liquid storage instruments, such as a separate savings account, e-wallet, or low-risk investment instruments such as digital gold or money market mutual funds.
Keep Emergency Funds in Treasury
After understanding the various ways to accumulate emergency funds, the next step is to choose a safe, liquid and stable depository. One option that is becoming increasingly popular is digital gold through the Treasury platform.
Treasury provides digital gold storage services that are safe, transparent, and easily accessible through the app. You can start setting aside funds little by little without worrying about the risk of inflation.
With digital gold, your emergency fund is not only safe, but also has the potential to maintain and even add value in the long run. So, don’t hesitate to start practicing the way to collect emergency funds that best suits your financial condition and secure your future with digital gold investment at Treasury!
