30 Oct 2022 | 3 mins

One thing that the spicy cough has taught us, is that life can get pretty unpredictable. You can get your shifts pulled ‘cause of lockdown, you could get some big bill outta nowhere or maybe you need to loan your ‘rents a bit of cash to help ‘em out.

Trouble is, you don’t always have the cash on hand. More than half of Aussie zoomers say they could only live off their savings for a month or less. Once that reserve runs out, you may have to borrow some money to make ends meet, which has all sorts of issues down the line. One thing they don't tell ya in school is that being poor can be bloody expensive. 

That’s where an emergency fund comes in. An emergency fund is a little pool of savings which is just for emergency expenses that have to do with the essentials. I’m talking about stuff like car repairs, maybe getting your wisdom teeth out, or covering your rent and groceries when work dries up a little. Think of it like a little insurance policy for yourself.

It doesn’t have to be a big task as well - the best way to go about putting one together is to set up an automatic payment of a small amount that you won’t really miss, maybe around 20 bucks a week. If you put away that much, by the end of the year you’ll have a cool $1000 that you can set and forget. The goal is to have about three months of living expenses tucked away - that way if for whatever reason you can’t work for a little while, you’re guaranteed food on the table and a roof over ya head.

It’s not all doom and gloom either - you could use that money to take some time off for some R&R, or maybe take that side project you’ve been working on a bit more seriously.

If you’re looking to get an emergency fund going, here’s a few tips to make it easy for ya:

  • Put the fund in something like a high-interest savings account. The interest rate will mean that you’ll hit your savings goal faster (stonks), and some accounts will have small penalties if you withdraw the money, which helps keep your grubby little hands off it until you need it.

  • Put the money aside as soon as your pay comes in. The key here is that it’s outta sight, outta mind. Seeing that fat number in your transaction account is a powerful temptation to have a bit of a blow out and miss your savings goal by the time you’re a couple of days before the next payday. Bonus hot tip is to set up an automatic transaction - just one more thing you don’t have to worry about!

  • If you take the cash out, make sure you top it back up ASAP. It only works if you actually have money in there!

All this stuff will take a tiny bit of budget work, but it can be a literal life-saver. If you’re feeling a little overwhelmed with all of this cash talk, don’t sweat it! We’ve actually got a load of great resources all about the stuff school didn’t teach ya about being a grown-up over here in our Academies.