Emergency! Paging Dr. Beat: Starting your emergency fund from zero to hero

Life can present and throw you so many curveballs.

‍

Living the way we do now, napakaraming uncertainties sa mundo na maaaring dumating sa atin at wala tayong capacity of hindsight para mapigilan ang mga ito. Ilan na lamang sa mga uncertainty na ito ay ang mga aksidente, sickness, loss of employment, at marami pang iba. As our elders have always said, prevention is better than cure. In this case, our prevention tactic is to have emergency funds to battle against these uncertainties.

‍

When the coronavirus disease 2019 (COVID-19) started wading its way through the streets of the Philippines, Filipinos had the initiative to start focusing on financial resilience despite the growing inflation rate of the country. In a 2023 study published by TransUnion, the organization noted that despite almost 80% of Filipinos expecting an increase in their income in the next 12 months, (a) 51% chose to focus on allocating their money to building their emergency funds and (b) 34% are paying their debts faster.

‍

Mas pinipili na ng mga Pilipino na magtabi upang mayroon silang safety net in case na magkaroon muli ng pandemic tulad ng COVID-19. It almost served as a wake-up call for them to start taking into account the unpredictability of life.

‍

How do you expect the unexpected?

‍

To be clear, savings and emergency funds are usually two separate things.

‍

Savings are for your future expenses that you are saving up with the means to spend decidedly one day. Dito na nabibilang ang pagbili ng kotse, sariling bahay, bagong cellphone, o kahit na iyong dream vacation.

‍

Emergency funds, on the other hand, are solely to have a fallback in case of any unexpected accidents, disease, or even losing one’s job. This is the type of savings that you hope you will not have to dip into but is ultimately a great reassurance in case you have to.

‍

Now, you may be asking yourself, “Do I really need an emergency fund? I am young, healthy, and in perfect control of my expenses!”

‍

Well, we hate to break this to you but life can give you so many crazy plot twists in just one year. Everyone should have an emergency fund.

‍

How does one start an emergency fund?

‍

We have all come to a point of understanding that emergency funds are essential, the next thing to figure out is how we start it. Good news: hindi mo kailangang mag-worry kung hindi ka pa gaano ka-flexible with your income. Kayang-kaya mo magsimula in baby steps.

‍

1. Review your finances and determine your budget

Start reviewing your income, expenses, and your overall financial capacity. Make sure you take into account your monthly living costs and all outstanding payments you would need to make. This gives you a clearer picture of how much you could allot to your emergency fund. From here, create a budget that prioritizes your needs more than your wants.

‍

2. Set a monthly goal

The key to setting a good habit is consistency. Stick to your monthly responsibility of adding to your emergency fund. It may seem like a small amount for now but trust in your goals as it will surely reap big benefits over time.

‍

3. Open a separate account

Opening a separate account with the sole purpose of housing your emergency fund will avoid the temptation of impulse or accidental spending. Mas mabuti na rin na savings account ang inyong bubuksan upang mas madali ang access dito in case of emergencies.

‍

4. Avoid unnecessary spending

Temptations to splurge and treat yourself more than necessary will eventually come knocking on your door. This is where your discipline will be challenged. Avoid spending on unnecessary expenses and focus on how your ‘future you’ will thank you kapag nalaman nilang pinili mong mag-save.

‍

5. Adjust and adapt

As life continues to move on, priorities and capacities can evolve. Try to regularly reassess your financial situation and adjust your spending/ saving accordingly. If this month proves a little harder to give out the full amount for your fund, then there is no shame in that. Tandaan, adjust and adapt lang!

‍

In the fullness of time, emergency funds are meant to be your ally in devastating days. With your emergency funds intact, safe at secure ka.

‍

Speaking of safety and security, did you know that there is a way to build your emergency funds with eTap? You can cash in and create a savings account/ e-wallet that you can easily access. Mas madali na ang pag-cash in at top up mo when you choose eTap!

‍

Simulan na ang inyong journey to financial security with eTap today.

‍

Written by Aira Matsushita (Copywriter)

Thumbnail by Mark Joshua Puig (Multimedia Designer)