If this past year has taught us anything, it's how important it is to have an Emergency Fund. Living paycheck to paycheck is extremely stressful, but sadly many people encounter this everyday as reality. Establishing an emergency fund may seem unreachable, but with these 3 steps from our friends at Banzai, you can do just that!

Step 1: Calculate your fund

To create your emergency fund, Banzai recommends to multiply your monthly take-home pay times six to find the amount you should ideally save. Don't get overwhelmed though, it is very unlikely that you will able to just put this money aside immediately. That is where step two and three will come in. 

Step 2: Set the goal

The best and most effective practice will be to create a monthly savings goal that will help you reach your final savings goal. Step two is where you need to sit down and determine how much you can realistically save each month to reach the final emergency fund goal of six months. After you have figured out your amount, it's on to step three!

Step 3: Make the plan

Step three is where it all comes together. You have already figured out your overall dollar amount that you need in your emergency fund. The next thing that you did was set a monthly savings goal that will help you reach your emergency fund total in X number of months. Now in step three, it is time to make the plan of how you are going to save that number every single month until you reach your end goal. 

To read Banzai's full article and access a budgeting tool to determine just how much you could afford to save each month, click HERE. 

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