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Before anything else, most especially before investing, you need to have an emergency fund. The higher the better. This might not be true to some, but emergency funds, more than savings in general, is more important.

No one knows what will happen in the next hour or so. God forbid, but hopefully nothing untoward will happen. But these are the things that are beyond your control. And for these you have to have a fall back or plan B until Z!

It might be something that you do not want to think about but need to prepare for nonetheless. Once you have an emergency fund, you are on your way to becoming financially smart.

Setting up an emergency fund means you are aware of unfortunate instances, but are courageous enough to face them.

Just like debt payment, setting up an emergency fund has its hacks as well, so no need to sweat it. Below are just some of the tips you can try. Mix and match until you find those you are most comfortable of doing.

Start low. Setting up an emergency fund is as challenging as saving itself, so start low and build it up in the next coming schedule. By starting low, you are able to at least start. Starting is the most difficult part. When you get the hang of it, it will come to you like it was instinct.

Substitute an entertainment or dining expense into an emergency fund. If dining out on Sundays is a routine, skip a few Sundays and put the money into your emergency fund instead. This way, aside from starting low, you are also increasing the frequency to save.

Set a number on how much you need. Do you need 6 months of your salary for an emergency fund? In truth, there is not right number, though many would say, 6 to a year of your salary should be fine.

Set it up and forget about it. Much like in investing, when you set up an emergency fund, t should only serve one purpose and nothing else. Once you’ve set it up, let it be a pray you will never have to use it.

Categorize it as an expense. Just like in saving, treat it like a bill that you need to pay at a specific time. This way, there is not excuse not to set aside something for it.

Slow but steady. You might be slow to save, but make sure it is consistent. The key to setting up your emergency fund is to be consistent, never forgetting, no matter how small the savings is. Something is better than nothing.

Sell stuff. Much like getting a job, but this time the proceeds go to your emergency fund. You might be surprised by the things you can sell. Especially with the Internet and eCommerce sites, there is nothing impossible. It’s a great way to boost your funds for emergency.

Invest in low risk. This might seem contrary to what this book is all about, but getting some help in building your fund is a good idea. However, do not invest in high risk investments such as stocks. Instead, there are Money Market funds that you can take advantage of. However, do this once you have had a chance to be knowledgeable about investing.

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