The COVID-19 pandemic brought many life lessons to the forefront, including the importance of health, life insurance, medical aid, and a safety net of emergency savings.
Many South Africans were forced to tap into their savings over the past year, with many companies reducing their staff contingent and some cutting employees’ salaries to try and stay afloat.
This meant many people had to tap into their savings to get by until their situation changed.
Sumitra Nydoo spoke to Personal Finance expert Eunice Sibiya, who shares tips on how to rebuild your emergency savings.
5 tips to rebuild your emergency savings
1.Cut down at least 1 major monthly expense
Look at your monthly expenses and see what you can cut. Determine if there’s something you can live without while you re-establish your emergency savings.
2.Rework your budget
Go through your budget with a fine-toothed comb to assess where you can cut costs and spend more responsibly.
3.Tighten up on how much you spend on utilities
The two biggest household expenses are groceries and utilities. Look at your electricity and water expenses for the past three months and see where you can cut down so you’re literally not pouring your money down the drain.
4.Find a side hustle
5. Scale back on your lifestyle
If you are trying to rebuild your savings you have to be frugal with your lifestyle choices. Say no to drinks with friends and limit your spending budget.
Remember your emergency savings should be able to cover your expenses for at least 6 months and should be a separate savings resource from your other savings and funds.