You know how it goes. Life is sunny and great, you have enough money to cover all your expenses, and you’ve even got some put aside for a great summer holiday with your significant other.

Life could scarcely be better.

And then something happens and ruins your tranquility — and your finances — in dramatic fashion.

Emergency expenses have a way of ruining plans, creating panic and financial hardship, and even ruining lives if things get too extreme and the right safety checks and routines weren’t put in place beforehand.

While an accident that wasn’t your fault may win you a successful claim with the help of a competent personal injury lawyer, there are many forms of emergency expense that might present themselves to you at unexpected times, which you’re not able to recoup in a hurry.

In these instances, it’s a major help to have some emergency savings set aside in advance. But how to begin saving for emergency expenses in a sustainable and effective way?

Here are some tips.

Budget a certain amount of your monthly income to “unexpected” fees

The first trick to successfully saving up for emergency expenses is simply to create a budget for emergency expenses, and to consistently add a certain proportion of your monthly income to that budget.

It’s not likely that you’re going to save up an enormous financial cushion against disaster in a month, unless you’re willing and able to put a major chunk of your income aside for that purpose, but by contributing incrementally and regularly in the same way you’d contribute to other expenses such as a pension, the amount will add up quickly.

Be strict about this budget, and use it only for things that are genuine emergencies. If you spent more money on beers than you were counting on, on a night out, that’s not a good excuse for dipping into your emergency expenses pot.

Use a reactive and adaptive budgeting tool

One of the great things about the internet is that it offers a variety of tools and services which make money management far more straightforward and effective than it was in the past, when everything had to be tracked using massive paper ledgers and pencil.

This is especially useful for creating reactive and flexible budgets, which allow you to roll with the punches, and easily move excess money from one category to another to cover emergency overspending.

YNAB, or You Need a Budget, is a web-based service for reactive budgeting.

Budget to cover your basic expenses for months into the future

One of the best buffers against future financial tragedy, is to cover your basic expenses as far into the future as possible.

If you’re earning decent money, don’t spend all of that money each month on a life of luxury. Live a bit more frugally, and set some aside for next month’s rent, and the month after, and so on.

If you’ve got enough money set aside to cover your basic living expenses for months down the line, a full-blown financial crisis is less likely to develop, even if you were to lose your job.

Thousands of people are already using TDB to improve their finances. Why not join the community and learn how to get more from your money?
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