A while back, i was reviewing my accounts, savings, expenses. I noticed that I actually don’t have any savings for emergencies. What do i mean by that?
I realized that what I have been doing is, when i get my paycheck, this is where it all goes to.
- 15% goes to our Joint account, which is meant for anything related to housing bills, future baby fund etc…
- 10% goes to my insurance
- 18% goes to my parents for their allowance
- 12% goes to my mandatory expenses e.g. transport, food, personal bills/subscription
- 8% goes to my other expenses e.g. clothing, new gadgets etc… (this fluctuates, sometimes i don’t spend, then these all goes to my investment as well)
- and the remaining 37% goes to investment!
What this means is, if i were to go out of job at this very moment, i don’t have any savings. It is all locked up in my investments. Pretty scary when i think about it. I mean I could still dig into the joint account savings but then, this saving is meant to be for housing bills etc…
So 6 months ago, i started building up my emergency fund. Instead of putting all the remaining into investments, I’ve decided that 7% will go to my emergency fund. Now this will mess up a bit on my financial goals, but I still think it is better to have that fund.
Now, how do i do that automatically? Since i have the OCBC 360 account, i was able to create a sub account, and set up a fund goal. This will automatically transfer a certain amount on the 1st of every month until i hit the goal amount. What i like about this is, i don’t have to do anything on my side after setting up. From then on it’s auto pilot.
And today when i checked my emergency fund, i have enough to tide through at least 2 months of my insurance bills and mandatory expenses. Of course this is still on going, so I will have more as it goes on.
Feeling pretty accomplished when i looked at it today 🙂