by: Ilse Smuts, Business Development Head at FNB Retail Cash Investments

Building adequate savings is one of the most effective ways to help you weather the storm and build financial resilience. Moreover, this will help you cope with unexpected events or circumstances that may have negative repercussions if you haven’t planned for unforeseen circumstances.

“Financial emergencies and unforeseen expenses can happen anytime.  This requires you to have a plan in place to help you navigate these unfortunate life experiences,” says Ilse Smuts, Business Development Head at FNB Retail Cash Investments.

It is never too late to prepare and save for emergencies, adds Smuts as she shares tips to start your emergency plan:

• Review your budget: the first step you need to take is to review your budget so that you can prioritise where your money goes and allocate funds to cover debt, living expenses and freeing up funds for your emergency savings. A well-thought-out budget can help you minimise unnecessary expenses and assist you build financial resilience to help you retire comfortably.

• Set goals: the general rule of thumb in building adequate emergency savings is to ensure that you have a list of three to six months of living expenses. While this may seem steep, it is necessary as it will help towards meeting your financial goals.

• Automate your savings: setup a scheduled transfer for emergency savings from the account in which your salary is paid. This ensures that you have a buffer should any emergencies come up and will also help you meet your monthly savings goals.

• Reduce non-essential expenses: constantly assessing your spending patterns and reducing non-essential items will allow you to have extra funds that can be allocated towards your emergency savings. Consider affordable alternatives for your subscriptions such as internet services, cellphone plans and unused gym membership. Also search for better deals on insurance and other regular expenses.

• Review and re-evaluate: the best part of looking back is the ability to assess whether your savings strategy is working or not to ensure that you employ new strategies that will serve you should circumstance change. Assess where and how you had to utilise your emergency funds and try allocating more should there be a need. This will not only help you beef up your savings but help ensure you avoid relying on debt in cases of a financial emergency.

“Your emergency fund is largely influenced and dependent on your current lifestyle, household income, your dependents and expenses. Therefore, it’s never too late to start saving to ensure that you and your dependents are safeguarded against unforeseen financial needs. Also, some financial institutions and retailers offer rewards benefits for being their client, take advantage of this and shop around for better deals,” concludes Smuts.