Tips for Building your Emergency Fund as a Budget-Conscious Mom

Few things are more important for parents than making sure you have the right budget in place. You want to ensure you have enough cash to pay your monthly bills, plan for the future, and even pay for the occasional fun day out with the kids. One of the biggest challenges most mothers face when they’re trying to manage their cashflow is finding extra finances at the end of the month to put towards an emergency fund. While this fund might not seem essential at first, it can help to stop you from having to borrow money or struggle with cash when unexpected incidents take place. Here’s how you can start developing your emergency fund without having to compromise on quality of life for you and your kids.

Start By Defining How Much You Need

The first step in building an emergency fund, and better money management in general, is having a clear goal for how much cash you want to save back just in case. The good news is there’s no one-size-fits-all rule for this. The best thing you can do is sit down and think about how much cash will make you feel confident that you’re ready to handle anything life has to throw at you. Most experts recommend having around 3 months of living expenses saved away. This should give you enough cash to deal with issues like broken appliances or a broken-down car. At the same time, it means if you were to lose your job, you can continue paying your essential bills while you search for a new opportunity. You can always add more cash than this to your fund if you feel like this will give you more peace of mind.

Cut Down on Monthly Costs

Once you’ve established how much money you need to keep in your rainy-day fund, the next step is finding extra cash to put aside each month. The easiest way to do this is to cut down on monthly costs. Start by looking for the low hanging fruit in your bills. If you’re currently paying for expensive student loans, you could consider getting ahead of high-interest rates by refinancing existing loans and seeking out a better deal. It’s also worth looking for ways to cut down on other expenses, like electricity and gas by switching to other suppliers. Only once you’ve reduced all of the necessary expenses in your monthly bills will you need to start compromising on other costs like entertainment.

Don’t Be Afraid to Start Small

Finally, when you’re looking to build an emergency fund for peace of mind, it can be frustrating to feel like you only have a little extra cash to devote to the process each month. However, it’s important to remember the quicker you get started, the faster your funds will start to build. Even if you can only put a tiny amount of money away each month, it will quickly add up. If you feel like you need to give your finances a boost, you can always look into extra ways to save money, like taking on an additional part-time job, or selling the toys and items your children no longer use.