Financial planners advise everyone, regardless of the size of an income, to have savings for unforeseen situations. We offer a few simple instructions and rules for creating a personal stabilization fund.

1. Determine the volume of savings

If you want to make savings, then the first step is to study your financial situation. It is necessary to count all incomes and expenses.

Firstly, calculate the amount of money you spend on life per month (including loan payments). An emergency fund may be needed in case of job loss. So ask the question: how long would your unemployment last?

Multiply your monthly income by the number of jobless months and you will receive an estimated amount of savings which may be necessary during the period of financial turmoil.

2. Make a savings plan

Then you need to write down a monthly amount of savings in the table of expenses and calculate the period, during which you will achieve the final goal.

You have to move towards the goal and develop the habit of regularly saving money. The amount of savings isn't as important as the formation of a habit to save money.

3. Avoid unnecessary spendings 

As a rule, people in modern society spend more than necessary. It can be visiting cafes and entertainment centers with friends, food delivery, branded clothing, or an expensive hobby.

However, in order to develop financial discipline, it is better to give up the usual pleasure or entertainment once a week and put the saved money to an emergency fund since any new amount reduces the time of achieving the goal.

4. Open a special savings account

If you want to create emergency funds, it is better to open a special savings account so that there is less temptation to spend money.

Modern banks offer many types of accounts. Consider the one where unplanned withdrawals lead to a decrease in profitability, thus you will have an incentive not to spend money without real need.

5. Make investments

It is also better not to use cash to create a financial airbag, as inflation gradually “eats” them.

It is more reasonable to invest savings in low-risk assets in order to reduce inflationary losses. It is important not to invest the entire amount in one asset in case of market fluctuations.

6. Automate savings

You can set up an automatic transfer of some part of your salary to a created savings account, like an auto payment for utilities, your phone or the Internet.

Automated systems will not let you “forget” about the next payment; they help you follow the elaborated financial rules more precisely freeing up time and attention for the main work.

7. Security measures

If you don't want to lose your savings, it is necessary to secure the fund. It shouldn't be too easy to access the savings account to avoid the temptation to spend money on everyday needs obeying an emotional impulse.

It will be best if the access to the savings account is opened a few days after the requestю In addition, it helps you protect it from fraudsters and extortionists.