David Morey 
You know an emergency fund is important. But let’s face it — the chore of building an emergency fund can be overwhelming when advice says to save three to six months of living expenses. Saving all that money is difficult to imagine, let alone setting in motion the habits that will help you save thousands of dollars.
If the big end goal prevents you from saving, let’s change the goalposts. Forget about thinking how hard it will be to save three months of living expenses. Focus on saving your first $2,000 first instead.
Why $2,000?
$2,000 may seem arbitrary, but it is a good primer for emergency savings.
Many studies test the health of consumer finances by seeing how easily they can handle an unexpected $1,000 expense. The latest survey shows 44% of Americans don’t have this set aside, while 38% of Canadians can’t come up with this much money in a pinch.
By doubling this benchmark, the $2,000 goal is both manageable and helpful, especially as new research shows most emergencies cost less than this. One survey reveals the average cost of an emergency is $1,700.
Should You Stop at $2,000?
While it’s a good primer for your savings, $2,000 may not stand up to prolonged financial bad luck. If you face several emergencies in a short period, you’ll run out of money. That’s why the emergency fund has such a large savings goal attached to it in the first place. With three to six months of living expenses in this account, you can handle consecutive emergencies as well as disruptions in pay.
The $2,000 serves as the first of a series of savings goals. It helps you cut out the noise of an overwhelming six months to home in on something you can realistically save in a short period.
What if You Run out of Savings?
Part of financial security involves being realistic. You have a good chance of dealing with an unexpected expense before you save $2,000. What then? Most people create financial safety nets out of credit cards and lines of credit.
Both work in similar ways, although you may be more familiar with a credit card. The biggest difference is that you usually draw against a line of credit online, and your lender transfers your approved funds into an account of your choosing.
To learn more about how a line of credit works, check out a lender like Fora. You can find broad-stroke information about this financial product, as well as details about Fora Credit in particular. Details are handy when you’re ready to apply, as you can compare rates and terms to find the best option for your emergency.
Simple Tips to Help You Save Your First $2,000
This guide is all about bringing emergency funds down to Earth, so let’s share some practical tips that help stock savings accounts.
- Audit Your Subscriptions: The average person spends $49 on overlapping accounts every month. Consider cutting this in half (or more) to give your savings a quick boost.
- Avoid the Nightlife: The average event- and concert-goer admits to spending $81 a night twice a week. If you like going out, try limiting it to special occasions.
- Make Meals from Scratch: Yes, takeout is easier, but it’s also a drain on your wallet. Just under three-quarters of people spend nearly $200 a month on dining out and takeout. That’s more than $2,000 in a year!
These tips will get you started, but you should go through your budget to look for overspending you can reroute into savings. You don’t have to cut out everything, but a little sacrifice can make saving $2,000 as painless as possible.
