Having an emergency savings fund gives you something priceless—peace of mind. But what happens when you actually face an emergency and have to deplete up that precious nest egg? Starting over can seem like a daunting task, so it’s smart to break it down into small steps.

If you like the security of having money in savings, but have gotten sidetracked by the very thing your emergency savings account was established for, there are two small steps you can take that will help your savings grow again without causing discomfort or budget distress.

Step 1: (Re)establish the habit. Begin a pattern of setting aside money on a consistent basis. Establish a regular pay roll deduction, set up an automatic payment to savings from your online checking account, or simply put all coins you collect in a jar and then regularly deposit the change into your savings account. If saving is a mental game for you, make a big deal out of each deposit. Sometimes you need the visual push that writing out the deposit slip and placing the cash on the counter provides. There is not a right or wrong method, starting (or restarting) the habit is the key.

Step 2: Increase slowly. Sometimes in our zeal to start saving, we overestimate how much we can save in a month. Plan to start small and work your way up. To ramp up over time, try the following strategies:

• When you receive a pay raise, put a portion into savings rather than increasing spending or expanding your lifestyle.
• When you receive a windfall such as a bonus, gift or inheritance, use some of it to increase your savings fast.
• Try analyzing your miscellaneous spending to see if you can find expenses you could cut to allow you to increase saving.
• Delay purchasing a new car when you pay off your old one. Instead save for a few months and build your savings.

Don’t let a short-term setback impact your long-term plans. Recognize that sometimes savings will be wiped out by unavoidable circumstances such as needed car repairs, unexpected expenses, or large purchases. When this happens don’t get discouraged, just reboot the system and start the habit again. The road to success is usually paved with a few potholes, but every bit of know-how you have gained can now be applied to rebuilding again.

Money Management International  is proud to recognize America Saves Week.  For more information on saving, visit AmericaSavesWeek.org.

Comment(s)

Where do you start, especially, when you already have more due than income. I work fulltime, but are unable to start to work overtime along with it. My head is not above water, I juggling and missing month payments.

This was great! It happened to me recently, when my fence fell over and I had to replace it. THere went my savings. But it felt so good to get started back with a 10% of earnings deposit this week. Thank you for the reminder!

great ideas ! keep up the goodwork

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