This is basic stuff – as the name suggests, this is a fund that is to be strictly used in times of emergencies only. That’s it!

Why this concept then is so confusing or hard to implement? Mainly because it involves that difficult activity – saving for an unforeseen future. Most of us are not good at deferring or postponing certain purchases. We like to act on impulse, encouraged by modern advertising that insists that YOLO! Problem then is this – in times of an urgent expense, be it medical or otherwise, we will be cripplingly short-handed and forced to borrow. An Emergency Fund is a protection against such a possibility.

If creating an Emergency Fund seems like a hassle, then may be a tweak in the approach is in order. The biggest point of resistance is in thinking that this would mean cutting down on everyday expenses. This thought can be evened out by the fact that what you may cut down, within reason, at this point will make your life far less stressful in the future. With money, it does pay to take on some level of current pain in the interest of future health.

That said, opening an Emergency Fund needn’t be that big a task for you. Just follow these steps, and begin with full confidence:

1) Know your Aim: Dedicate your Emergency Fund for a very specific reason and keep it unchanging. It can be a general fund, or a medical fund, or even a new home fund. Point is, once its purpose has been set, it becomes untouchable for any other purpose!

2) Start for sure, even if small: It is a common misconception that Emergency Funds are a great load of work to realise. You can simplify the process for yourself by dedicating small sums to it initially. You will be encouraged by how little a difference is being made in your daily reality, and how substantially the corpus is growing.

3) Choose a simple account: To keep your motivation up, select a simple bank savings scheme with a reasonable level of interest, instead of a risky time-consuming investment.

4) Let the contributions be direct deductions: If voluntary savings are tricky for you to initiate or remember, then choose a low-risk scheme where your money gets deducted directly from your income every month. This will prevent any misses, and give you clearer views of your real liquidity.

5) Include it in your financial calendar: Feeding your Emergency Fund should be a part of the disciplined financial plan you make month after month.

6) Give yourself breaks: Life is unpredictable, and of course your Emergency Fund understands! If an especially crunched month or longer period comes by, then give your savings a temporary pause. Once you have recovered, though, make sure that you go back and continue.

7) Make some lifestyle changes: Eat out less, walk more, shop only when necessary and create solid priority lists – your future financial health may hinge on these decisions! The money you save thus wouldn’t seem painful if you take a healthy approach to the changes.

8) Put in more when possible: In the event of an increment or additional savings, gift the Emergency Fund with an extra bump of feeding. This would also compensate for any lean months.

9) If possible, take up an extra job: If you can spare the time, even a weekend job can make a difference. Direct all or most of this income to the Emergency Fund, so that daily expenses don’t seem stifled.