Unexpected or “Emergency” expenses can happen and can be expensive. Being prepared for emergencies is important to avoid financial struggles. According to CNBC, 56% of Americans cannot handle a $1,000 emergency expense without going into debt or using a credit card.
This is an alarming statistic, and one that business owners, CEOs, and entrepreneurs should take the time to address.
To make things worse, these expenses can come up anytime and often need quick action. So what can you do?
Building a Quick Access Account
What is a quick access account? This is an account where you can store money for emergencies or purchases you want to make soon. It’s important to have one if you want to be able to pay for an emergency without having to go into debt or use a credit card. You can start small by setting up an account with $100 in it and then add $1 or more per day or $10-$20 per month based on your budget. A financial cushion helps keep you financially stable when unexpected things happen.
Prepare for Unplanned Expenses
Besides creating an emergency fund, there are other steps you can take to prepare for unplanned expenses.
For example, setting aside extra money each month towards unexpected costs or creating a budget for “fun” activities or trips. This way, you won’t be tempted to dip into your emergency funds if something pops up .
You can also try reducing your spending in other areas. You can eat out less or cancel a monthly subscription that you are no longer using. This way, you’ll have more money available when emergencies happen.
Budgeting with Automation
Automating your finances can also be helpful when managing emergency expenses.
Automation allows you to set aside money each month. You will have funds available in case of an emergency. You do not have to worry about manually transferring money each time you need extra cash.
Automation makes budgeting easier and more efficient. It allows you to track your spending habits better over time. It also builds up your quick access account faster than manual transfers would allow.
Having funds available for unexpected expenses is essential for anyone. Having a plan for emergencies not only helps reduce stress, but it also keeps you from going into debt. It also helps you avoid relying on credit cards too much, which can harm your financial situation in the long run.
If you’re looking to get your finances in order, these three tips are a great place to start. By building a Quick Access Account, preparing for unplanned expenses, and budgeting with automation, you’ll be well on your way to financial success. So what are you waiting for? Get started today and see the difference it makes in your wallet tomorrow.
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