Building Good Money Habits

Safety Net Money Habits

Safety net money habits are imperative in any household, as these involve the money individuals should save to keep them safe if something happens. For example, one might consider their emergency fund a safety net. It’s there for them in case something happens and they cannot afford to make a payment to deal with the situation (e.g., repairing significant car damage). Once a person has an emergency fund with at least one thousand dollars in it, they need to continue adding to it until they have at least one year of income in the safety net.

One way to create a safety net is to open a savings account and have income automatically transferred into the account when paid. Anyone can do this by creating the transfer with their bank or even with their employer. It’s best to add as much to it as possible as often as possible to make it simpler and more effective. Start with as much as possible and continue to add more when raises are offered and when unexpected money comes in.

Continue reading to reveal the details of the paying yourself first money habit.