Use Savings Buckets Beyond the Emergency Fund
Most of us have lived paycheck to paycheck at some point, creating some financial strain and worry that can be hard to overcome. As you advance in your career and earn more income, you can start building an emergency savings fund that serves as your safety net if something pops up that you didn't budget for, such as a flat tire or an unexpected medical bill. Creating multiple savings buckets can help you move toward your financial goals.
Start with a car repair fund. An unexpected car repair can put a financial damper on your day. Setting aside money from every paycheck can alleviate the worry that comes when you realize you need to repair something on your vehicle.
A personal fund is also important. When you think about your personal goals, you may realize that some of those goals have an investment behind them. If you've always dreamed of starting your own business, you'll need some capital to get started.
If your personal goal is to run a marathon, you'll need some money for running shoes and gear, as well as to cover the entry fee for the race. Setting aside a little bit of money each month can help you build a personal bucket that allows you to work toward your goals.
Finally, a separate travel or vacation fund allows you to take trips and make memories with your loved ones without worrying about dipping into your emergency fund or other savings account. Even saving just $200 a month will put $2,400 into this bucket by the end of the year, which you can use to explore the world around you.