Securing Your Future with an Effective Emergency Fund Plan

Ever found yourself facing an unexpected expense and wishing you had a financial cushion to soften the blow? That's where the elusive emergency fund comes in, and in our latest episode, we unpack the what, why, and how of safeguarding yourself against life's unforeseen mishaps. My own car troubles got me thinking – wouldn't it be grand to have a stash of cash for times like these? Join me as I candidly share my journey toward financial preparedness, from the initial shock of realizing I'm not as money-savvy as I thought, to the small triumphs of squirreling away some extra dough.

Navigating the path to building an emergency fund can feel like you're pinching pennies until they scream, but fear not – I've got some practical strategies to share that make the process less of a headache. We'll talk about dissecting your spending habits with surgical precision and discovering those hidden cash leaks in your daily routine. Meanwhile, I'll bust some myths about the amount you "should" have saved and offer reassurance that even a modest fund is a step in the right direction. So whether you're a budgeting pro or your wallet is a free-for-all, tune in for a real talk on getting your finances into shape – because when life throws you a curveball, you'll want to be ready to catch it.

Transcript

Speaker 1: 0:46

Hello, welcome back to another episode of Talk Mode. Today we're talking about an emergency fund. Now, I sometimes get asked how do I end up with these topics? How do I choose these topics? Well, a lot of the time it's because something's happening in my life right now where it makes me think about a topic, and then I decide to do an episode on it. On it, and right now, well, I've been thinking about how useful an emergency fund would be.

Speaker 1: 1:26

So what is an emergency fund? Well, emergency fund is an amount of money that you keep aside for emergencies. It's literally what it says on the tin. People say you should have around three to six months worth of wages put aside, but or worth of not wages but bills and rent, and all of that covered for three to six months. You should have that put aside. And I say in response to that how the fuck is anyone actually doing that in this current climate? I mean, if you're like me, you're pretty much going paycheck to paycheck, maybe a little bit extra on the side, but for the most part you, your paycheck covers your bills and your expenses and food, and maybe a few pleasures here and there and that's it.

Speaker 1: 2:19

Um, so in today's episode we're going to talk about the emergency fund, how we can maybe go about putting one together and some reasons why we might need one. For example, I said topics come into my head because things happen in my life that cause me to think about things. Well, most recently, my car's in a bit of shit. Engine lights come on. No idea what's going on with. It Could cost a bomb to repair, may need to get a new one, who knows, could cost a bomb to repair, may need to get a new one, who knows? Um, but I thought how nice would it be right now if I didn't have to stress about any of that because I had some money put aside. Now no one's talking about actually putting aside three to six months worth of bills, wages, whatever you want to call it. I think in in the current climate, that is maybe a little bit unrealistic. However, there's no harm in trying to put that together in terms of let's put a little bit of money aside that might eventually end up representing three to six months worth of bills, etc. Now, that might take a really, really long time, but it's better than having nothing aside, because right now I'd feel a lot more comfortable if I knew that I had some money sitting behind me, you know, to resolve any problems. Now, my example right now is a car, but there's loads of things that could happen. You know, a knock on wood, you lose your job, or you know what the current market is like loads of redundancies happening all over the place. Well, having some money put aside would give you a little bit of comfort while you're looking for the next one, or something else goes on the fritz, like you know, the fridge breaks down or some shit like that. You need a little bit of money sitting there in an account that you don't look at, you don't touch. It's away from everything else, so that if you need the money, it's there. This is not the same as saving up for something like a holiday or whatever. No, this is money you put aside and never touch, unless there's an emergency. Well, so how do we go about putting that money together? Well, it's not going to be be great, but it is doable.

Speaker 1: 4:59

The first things first. You really got to figure out where your money actually goes. So you're gonna track your expenses for a month. You know I've talked about budgeting before. I like to use spreadsheets etc. But you're gonna do that on a little bit of a even more miniscule level. I'm talking about tracking every single penny that coffee in the morning, red bull well for me anyway or any other little things. You know you pick up lunch at work sometimes because you feel like, or that saturday night takeaway or whatever. Every single little bit gets written down.

Speaker 1: 5:38

Next thing you want to do is, well, you break it down right, and you can do this in various ways. You can go extra with it, where you break it all down on a spreadsheet and kind of put it in categories and see where most of your money's going. Or you just eyeball it and decide well, you know what, that extra freaking coffee I go out for at lunch? Well, that can be cut off and I can start building my emergency fund or something else. I don't know. Really, you got to see what's your priorities in what you do. Maybe that coffee is really important to you and really makes you feel better and allows you to work that extra six hours, or whatever you do. In that case, maybe you don't want to cut that out. Maybe there's something else you can cut out. But it's just simple budgeting 101. You need to figure out where you can trim the fat and put some money aside.

Speaker 1: 6:34

Second thing you could do is start a side or so. I've talked about these before as well. You know me a lot messing about at car boot. Do a bit ebay selling this, and that we'll start doing some of that. Yeah, I'm sure you've got crap lying around the yard that you don't use, that you don't want anymore. You don't even look at anymore Old clothes, whatever. Put it on Vinted Facebook, marketplace, ebay, take it to a car boot and you make a little bit of cash. And that can be your starting point. Now that you make a little bit of cash, and that can be your starting point, now that you know you're gonna make a bit of cash, maybe 100 quid, couple of hundred quid. It's not gonna be enough to be called an emergency fund, but it's a starting point and maybe this, alongside doing your budgeting check, can start building a fund for you. The.

Speaker 1: 7:23

The third thing I'd suggest is to automate the whole process. So they always say you might have heard this saying before but pay yourself first is a saying that goes out. So after you get paid from your wages, you pay yourself first before you go out and pay the rest of your bills and maybe, if you use that mentality going forward, you can pay your emergency fund first. So treat it like a bill. Set a direct debit up on your account if you're in the UK and just set it to go to a different account and just call that your emergency fund direct debit. 50 quid, 100 quid, whatever it is, whatever you can afford that. You know you normally just spend on takeaways and whatnot. Set that aside like a bill, act like you've just taken on another thing and then you'll be able to put that money aside.

Speaker 1: 8:21

You know, this emergency fund isn't anything about like getting rich or just having money for the sake of having money. It's a financial cushion to soften the blow when life throws some shit at you, you know. So I say start working on that today, start building your emergency fund. Remember, even the small little steps that you do will add up. So hit me up in the comments and let me know if you have any creative ways you're saving for your financial fortress until next time. Keep it real, keep it hustling, keep building that safety net. Thank you guys, very much for listening. I'll see you on the next one.