Secure Your Financial Umbrella

How To Prepare Your Emergency Fund for Unexpected Rainy Days
October 1, 2023 | by HC Mutual

Life is unpredictable. Emergencies such as job loss, medical bills, home or car repairs, and natural disasters can happen anytime and can cause a huge financial burden. If you don’t have an emergency fund, you may have to rely on credit cards or loans to cover unexpected expenses. This can lead to the accumulation of debts and further financial hardship.

Having an emergency fund gives you peace of mind and allows you to face the unexpected with a reliable financial capacity. Yet at present, most people find it difficult to start saving for an emergency fund due to insufficient income, other financial priorities, and lack of discipline.

You don’t have to pressure yourself into growing your emergency fund right away. No matter how small your savings are, the important thing is you constantly set aside a portion of your income as your emergency fund. It will eventually grow and secure you whenever you need it.

To help you on your journey towards building your emergency fund, here are some tips and strategies to start.

1. Set a goal.

How much money do you want to have in your emergency fund? A good goal is to have three to six months of living expenses saved up. This will give you a cushion to fall back on if you experience financial hardship.

But if this goal is too overwhelming due to your monthly income and other financial responsibilities, you can start by aiming for an emergency fund equivalent to one month of living expenses, then eventually level up your goal once you already have the capacity for it.

2. Automate your savings.

One of the best ways to save money is to have a savings account separate from your current or payroll account, and then to set up an automatic recurring transfer to your savings account each month. This way, you’re saving money without even having to think about it. It will also help you develop the habit of paying yourself first before making any purchases.

3. Sell your old stuff.

Ever heard of Marie Kondo? It’s time to go through your belongings and say thank you and goodbye to what you’re not using anymore. If you haven’t seen or looked for a piece of clothing or item for 3 months, it’s probably time to let go and give other people a chance to love them instead.

Sell anything you don’t use anymore that can be useful for other people like bags, clothes, furniture, gadgets, and more. You can sell items online or set up a garage sale. Your profit from selling pre-loved items can be an alternative source of income that can increase your financial capacity and help you grow your emergency fund. And it’ll help you declutter, so win-win!

4. Get a side hustle.

If you need to save money quickly, consider getting a side hustle. Do you love making art or baking? There are many ways to make extra money, such as freelance writing, driving for a ride-sharing company, or starting a small side business. You can also consider free upskilling courses to expand your skill set.

5. Trim your budget.

Take a close look at your monthly budget and see where you can cut back. Maybe you can eat out less, cancel unused subscriptions, or shop in more affordable stores. Every little bit helps when you’re trying to save.

Afterward, decide how much you want to increase your monthly savings and secure it in a savings plan that can surely benefit you in the long run.

HC Mutual offers KayaMo Saver’s Plan that features competitive interest rates and easy ways to save automatically through payroll deduction or automatic debit arrangement. This way, you can grow your savings quickly and achieve your financial goals sooner.

Prepare for any emergencies
through saving.

Flexible payment terms of 3, 5, or 7 years
3% earnings per annum
Easy saving through payroll deduction, automatic debit arrangement, or payment through any U Store branch nationwide

In situations where you are faced with successive emergencies and need extra cash right away, HC Mutual offers a multi-purpose loan with low interest rates.

We’ve always got your back.

Interest rates as low as 0.99%
Loan release within 24 hours of approval
Fast and hassle-free loan application

Saving for emergencies can be challenging, but it’s important to remember that even a small amount of money you can set aside can make a big difference. By following these tips, you can start building an emergency fund that will serve as your financial umbrella during unexpected rainy days.