Every other blog on the internet suggests you put aside money for at least three months of your living expenses to make ends meet during the financial shock, such as losing your job and meeting a large unexpected expense. Unfortunately, this piece of advice falls on deaf ears as you prefer to cross the bridge when it comes to it.

An emergency cushion can prevent you from borrowing money. Though more convenient, loans are expensive because of interest. You should always try to stow away money for emergencies so you can save your money in interest payments. They should ideally come into the picture when your savings have fallen short of cash. They can be used to bridge the gap.

Saving three months’ worth of expenses is not a cinch. It may seem a paltry sum that you think you can save within a couple of months, but that is a myth. It will take a much longer time than you expected.

First off, you need to examine your budget. Go through the bank statement of the previous six months and find out how much money, on average, you need for your essential expenses every month and then multiply that figure by 3 to know the three months’ worth of savings.

Ways to build your emergency cushion

Here are the four ways to build your emergency cushion:

·         Whittle down your monthly outgoings

Undoubtedly you will have to whittle down your expenses to free some money to set aside for a rainy day. Look at your budget and see where you can trim down. Your fixed essential expenses will remain the same. Focus on the variable expenses. Think of ways to save money on groceries and travel.

·         Maybe buying in bulk can help you.

·         Buying from a local supermarket that takes an additional 5% off the retail price might be a wise attempt to save money.

·         Buying generic products will also help you save money.

Apart from that, you need to focus on discretionary expenses. If your savings are too low, you will have to be too rigorous with your efforts of stashing away. Say no to all of your discretionary expenses unless your savings reach a certain level. Then, you can start spending on inessential expenses, but make sure that you do not dissipate money.

·         Open a savings account

The next step is to open a savings account. Keeping money idle in your wallet or piggy bank will take you nowhere. You will be tempted to dip into those funds. You cannot achieve your savings goals if you keep dipping into funds. In addition, it will be difficult to keep tabs on your savings.

Instead, you should open a savings account and keep your money in it. Savings accounts do not yield very high interest rates, but they can prevent you from withdrawing funds for your regular expenses.

Choose a fixed limit that you want to transfer to your savings account every month. You can do it by linking your salary account to it.Choose an auto-debit feature. Funds will automatically be transferred to your savings account on a specific date every month.

With a savings account, you will know how much amount of money you have already saved. It becomes much easier for you to track your savings. You will feel motivated to keep stowing away money.

·         Set a savings goal

Identify how much money you need to save for a rainy day. Coming up with a figure is vital to achieve your goal faster. Choosing a random number without knowing how much you actually need will take you nowhere. Once you know how much money you have to save, you can easily pick a monthly savings limit.

Start with a smaller goal. It will keep you motivated. Once you have achieved your target, you can set another goal. There is a chance that you will come across some big expenses and dip into your emergency cushion. Do not be terrified if you have to fall back on your savings before hitting the target; after all, this is why you intended to create an emergency corpus in the first place.

If you need to borrow money, you can. Fair credit loans in the UK can fill the gap in your savings. You can get money even if your credit report is not up to scratch, but you will end up paying high interest rates. It is recommended that you maintain a good credit rating.

·         Pay yourself first

Many of you save what you are left with after spending on all your needs, but this strategy is not fruitful at all. You should pay yourself first. It means salt away money as soon as you receive your monthly cheque. Set up a regular payment into your savings account. The money will be automatically transferred to your savings account without your need.

Ways to help you save for your emergency cushion

Here are the ways how you can increase your savings and build an emergency cushion:

·         Save money on travel

If you commute to work by train, you should try to get a pass rather than buy tickets every day. It will help you save a significant amount of money. Likewise, you should walk it if you are to go to the nearest market. Use your car for longer distances only.

Be smart with fuel consumption. Do not drive at high speed because it will consume more fuel. Do not let the engine be on at traffic lights. The money you save on tickets and fuel should be transferred to your emergency cushion.

·         Save spare change or what you are left with at the end of the money

You can boost your savings by saving spare change. There is no need to handle cents and coins because your bank can round it up to the nearest number. At the end of the month, you are left with some money after meeting all of your expenses, which you can carry forward to the next month for your spending. You should deposit that money into your savings account.

·         Switch energy suppliers

Energy prices can take a large chunk of your budget. Therefore, you should figure out a way to save money on energy bills. Avoid keeping the heating system on throughout the day and put additional layers. Energy rates vary by energy supplier. Do some research and choose a supplier that charges lower rates.

·         Shop around your phone and broadband contracts

You can take advantage of being a premium customer to negotiate better broadband and phone contracts. Companies keep introducing new plans that go unnoticed by many of you. You should keep an eye on them. Chances are you come across a cheaper plan.

The bottom line

It is paramount to build an emergency cushion as it helps prevent you from rushing to direct lenders to borrow money when you are in a tight spot. Of course, you will have to be a bit patient while building an emergency cushion because it depends on your budget. If your income is high and expenses are low, you will more likely be able to save one month’s worth of living expenses faster than your counterparts.