The importance of having an emergency fund

With bills, rent and other expenses to worry about, it can be tough to save some of your paycheck incase of a “rainy day”.

While most people have savings for travel, entertainment or eating out, it’s important to think about the what happens if you have to pay for an unexpected car repair or in need of bond money when moving into a new rental property.

According to the Australian Securities & Investments Commission, only 46% of Australians save for a rainy day fund. From this statistic alone, it reveals that more than half of the Australian population dismiss saving for emergency purposes, which is worrying since this could potentially put them in financial stress or add more debt into their lives.

While the saving habits of Australians seems to dwindle, Skillstalk have rounded up some of the best financial tips from the archives to help boost your emergency savings in no time.

Quick ways to build your emergency fund

1. Track your spending.
2. A side hustle can boost your savings.
3. Know what government funding you’re entitled to.
4. Manage your expectations. 

1. Track your spending.

Being the era of ‘tap and go’, it’s hard not to have that “ignorance is bliss” approach when it comes to your finances. However, it’s important to understand where your money is going and understanding your own spending habits. 

While seeing your paycheck come through after a long fortnight can be tempting to blow it all out on that long-awaited holiday to the Maldives, it’s also smart to have some penny pinching habits when it comes to your savings.

Not only is tracking your spending helpful when it comes to managing your money, but it gives you the discipline of putting away money that can be saved for emergencies. Something as simple as $50 a week can add up and be of real value in the future.

There’s no doubt that you may have some unexpected bills that you need to pay for, so knowing what your spending habits are on a weekly, fortnightly or monthly budget can help you see what costs are worth cutting out from your usual expenditure.

Top financial tips from The millennials guide to saving money in 2019:

• Bring lunch and snacks to work instead of eating out.
• Walk or take public transport instead of paying for an Uber.
• Invest in your superannuation while in your 20s.

2. A side hustle can boost your savings.

The booming ‘gig economy’ is no surprise with rising costs of living and expenses, and while having one job can be sufficient when it comes to paying your bills, making the most of your skills and experience can help you step into the world of freelancing and even be an effective way to grow your income. 

If you need a break away from the corporate life and want to hone your inner creative self, taking a look into upskilling can be a great way to get yourself a side hustle that suits your interests and skills at the same time. Upskilled has plenty of courses in business, finance, marketing and retail, which can all be done online.

Studying online has plenty of benefits and you can manage both your personal and work life by doing the course work at a time that suits you. Not only that, but choosing to study can help improve your employment prospects and adds incredible value to the chosen career path you wish to pursue.

A side hustle is a great way to boost your savings by tenfold and makes managing money much easier. You can divide your day job income into your usual expenses and all the money earnt from your side jobs can go towards your savings, giving you the much-needed buffer when it comes to emergencies.

Top financial tips from Tips to help you save money so you can stop living paycheque-to-paycheque:

• Pay down debt by starting with the highest interest loan.
• Schedule automatic transfers when it comes to your bills and savings.
• Know the reason behind your spending and filter out the ones you don’t need.

3. Know what government funding you’re entitled to.

You may not be aware of what type of government funding is available but given you meet the requirements, you may be eligible to receive some assistance that will help you top up your emergency savings. 

There are different government savings and rebates available in each state/territory and online tools that can help match what you’re entitled to depending on your circumstances.

For example, if you’re currently residing in NSW and want to find out what rebates or funding you could receive from the government, you could use the NSW Government Savings Finder, where it will provide you with a short questionnaire that will match you up with savings and rebates you may be entitled to.

Not only is government funding a great way to save costs on your utilities and childcare expenses, having the government assist you can be a great way to help you have more money that you can put aside when it comes to emergencies.

Government funding is also available for most Upskilled courses depending on what Australian state or territory you live in. Given that you meet the eligibility requirements, you could get the government to pay for some of your course fees, leaving you with a smaller bill when it comes to your studies.

If you find the convenience of online study beneficial when it comes to your current lifestyle, start your course search, and learn about what courses are available for government funding. For more information, check out Upskilled’s FAQ section on Government funding here.

Top financial tips from What government savings and rebates am I entitled to in 2019?:

• Check out your state or territory's government website and see what funding is available for childcare, utilities and education.
• Use the tools available on government websites to see what rebates and funding that you could be entitled to according to your circumstances.
• Speak with an Upskilled Education consultant and learn about your eligibility when it comes to government funding for your course.

4. Manage your expectations.

While budgeting sounds like a chore, it really isn’t once you have a ballpark figure in mind when it comes to your savings. You may have taken up a course with Upskilled but as a result, reduce your hours at work because you need time to complete your assessments.

With the reduction of work hours, this could mean that you may need to adapt a much more frugal approach when it comes to your money, meaning that you may not have the luxury to eat out twice a week like you used to before choosing to do a course.

Managing your expectations when it comes to your money can be a great way to boost your emergency savings because it gives you the discipline of knowing where your money is being put towards, and what you should do with it to help improve your standard of living.

Furthermore, it will give you a chance to really budget, helping you find the right balance when it comes to fun and work, so that you can be smart when it comes to your Friday night ideas that won’t blow out your budget.

Top financial tips from 6 budget tips to help you save money as a student:

• Have a budget in mind when it comes to food and drink, setting boundaries to what days you can spend on specific “luxury” items. For example, having alcohol only on the weekends.
• Be open to vouchers and deals on websites like Groupon to help you save costs on dining and entertainment expenses.
• If you can’t pay upfront when it comes to your course fees, take advantage of Upskilled or Zip Money’s payment plan schemes.

Looking to boost your emergency savings even more?

If you’re looking to save even more when it comes to your finances, a great way to grow your income or get the promotion you’re looking for at work is to gain a relevant qualification. Upskilled has plenty of courses to choose from in business, IT, human resources, marketing and more.

Courses are completely online and can be done at a pace that suits you. Most Upskilled qualifications can be done within 12 months, or earlier depending on how quickly you get through the assessments.

Not only does studying look attractive on your resume, it can be a great pathway when it comes to bumping up a salary range so you have more funds to funnel through to your emergency savings.

Start your course search today and speak with one of Upskilled’s education consultants to discuss about your career goals and course suitability.

This article should not be taken as expert financial advice. Please consult a financial specialist for further advice on your circumstances.