You’ve probably heard of the importance of having an emergency fund. ‘Have an emergency fund’, they said. ‘It’ll be fun’, they said. Well maybe nobody has said that, but that doesn’t take away from the importance of having one, even as a student.
Why do I need an emergency fund as a student?
Having an emergency fund will give you the same confidence for dealing with emergencies as Barry B. Benson.
Although it might not seem like there are that many emergencies as a student, you might be surprised at how many things can actually happen. If you own a laptop and it suddenly dies as your studying for exams, if you have a car that decides to break down on your way to class, or maybe there’s another textbook for your class that you didn’t think realize. An emergency fund helps relieve you of the stress of worrying about these things. It also helps you take out less debt to pay for these emergencies. Most students graduate with student loans, and although you might not see it now, your student loan can add up over your time at school. If you can minimize the amount of debt that you have upon graduation, it’ll make a huge difference when you start your career.
How to start an emergency fund
It can be a bit tricky to start saving as a student, but it’s not impossible. Here are some easy ways to start adding to your emergency fund:
- Automatic savings
- You can set up an automatic transfer from your chequing to your savings account so that you don’t have to worry about doing it manually. Even if it’s small, those small recurring contributions add up. You can even start with something as small as $2.00 a week (like you’re buying a cup of coffee)
- Pay yourself first
- If you have a part-time job or a bit of extra cash, make sure to take some of it and put it into your savings right away. You work hard for your money, so make sure that you pay yourself first. Your future self will thank you.
- Round up
- Some debit cards have the ability to round up your purchases to the nearest dollar and deposit the extra amount into a savings account. Say you buy a snack for $1.50. With roundup, it will round up like you made a purchase for $2, but deposit the extra $0.50 into a savings account. These small amounts can add up over time to give you a healthy start to your emergency savings.