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What to Do After My Emergency Fund Is Fully Funded?

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An emergency fund is a very important part of being financially secure. It is a savings account that you access only in the case of emergencies.

So, deciding to build up an emergency fund is a great way of not having to worry so much about these unexpected little blips in life. The fund can also save you from having to take out a loan in these cases, meaning that it will also save you money in the long run.

What Would I Need an Emergency Fund for?

The whole point of an emergency fund is that you do not know what it is going to be used for. The only thing that you know is that it can save you financially (and perhaps mentally as well). 

However, we will include some examples of what the fund should be used for to give you a rough idea. Frivolous things such as buying a new TV are not ’emergencies’ and so should not be treated as such. Emergencies can include:

  • Losing your job
  • Becoming ill
  • Car repairs (or having to buy a new car)
  • Funeral costs
  • If you have to take time off of work for any reason
  • House repairs (not aesthetic)

Any of these examples are things that can be very expensive and need to be solved as quickly as possible. 

Where Should I Keep My Emergency Fund?

It is very common to simply keep your emergency in a current account. However, unfortunately, this means that your savings will decrease in value in line with inflation. So, by the time that you need to use your emergency fund (which is hopefully never), you may have a lot less money than you initially did. 

Instead, once you have accrued the desired amount of money you should consider placing it somewhere where it can gain in value. Even simply placing your money into a high-yielding savings account is a better option. Whereas normally a bank account will give you 0.1%, this type of account can offer you much more. 

If you are up for taking a bit more of a risk then you can even consider enlisting the help of a financial advisor to aid you with investing your money. This way it will not lose its value simply sitting in the bank.

What to Do After My Emergency Fund Is Fully Funded?

If you are fortunate enough to be in the position that you have a fully-funded emergency fund, you may be wondering what to do next. Luckily, we have made the process simple for you.

There are still many things in life to save for, so even though you may have covered yourself in the case of an emergency, there are still more things to work toward. We will detail these below.

Save Up for a House

Typically, market prices increase year on year. So, one of the best things that you can start to do after you have fully funded your emergency fund is to start saving up for a house.

The amount of money that you will need for a deposit will depend on the value of the house that you want to buy and the percentage of that sum that the mortgage lender requires. 

However, this can be a very large expense so it may be best to decide to save a certain percentage of your income every month. That way you will know exactly how long it will take you to save up the amount needed to put down your deposit. 

https://www.simplemoneymom.com/fully-funded-emergency-fund-how-much-save-where/

The more money that you can put down as a deposit the better off your monthly expenditure will be after this. That way you can then start saving up for other expenses down the line, such as retirement. 

Save for Retirement

Nobody wants to work forever. In fact, for most people the earlier they can retire the better! Remember that other expenses, such as buying a house, paying off any debt, or buying a car will typically come first. You should prioritize them before saving for retirement so as not to financially burden yourself later on in life. 

Save for Your Child’s Expenses

If you have children, another thing to consider saving for is their expenses. This can include anything from money for school trips, a gap year, and even college tuition.

All of these things can be very expensive and may even be impromptu decisions. So, having some money squirreled away for them is a great idea. 

College fees and textbooks can be incredibly expensive and so the more money that you can put upfront the less that you will need to borrow in loans.

Even if your child decides that college is not the right option for them and their life then you could always help them financially toward buying a house, a car, or even a wedding. The idea is that your savings can help them financially too by reducing the amount of money that they will need to borrow in the future. This effect can then snowball over generations. 

https://www.moneywithkatie.com/blog/fullystocked

Enjoy Your Money

At the end of the day, you work so that you can have money to enjoy your life. So, as long as you have all of the basics covered and you can afford your lifestyle then put some money aside for little treats, holidays, and days out as a family. This way you can be both practical and happy with your earnings. 

Conclusion

Having an emergency fund is a great way to make yourself financially secure. You will no longer need to worry about finding the money to fix your car or the roof.

Instead, you can be safe in the knowledge that you have that covered. If you have achieved the sum of money that you wanted to save as an emergency fund then you have several options.

You can start saving for other large expenses, making your future more financially secure, for example, putting money towards a deposit on a house, paying off debts, savings for your children (for future children), and then eventually for retirement. 

As long as you are able to cover your basic costs of living then budget the excess income. That way you can set financial goals and continue working towards them whilst also allowing yourself a little bit of play money to save up for things such as holidays and material possessions. 

By knowing that you have a fully-funded emergency fund to fall back on you can begin saving for the big concrete purchases in life. 

Image by Karolina Grabowska

The 3 Best Cash-Back Apps

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cash-back

Nowadays, there a a million ways to make money online. You can take surveys, offer your skills, make videos, and so much more. I mean, it’s the internet!

But, did you know that there is a way that involves little effort and will actually earn you money just by shopping?

Yes, you do this by using cash-back apps. Here we will tell you everything that you need to know about these apps and let you know the 3 best cash-back apps.

What Is a Cash-Back App?

A cash-back app is a provider that gives you a rebate based on the products that you buy.

This may be in the form of money or a coupon for your next purchase. Some apps even have a points system through which you can redeem points for further discounts. 

7 Best Cashback Apps That Everyone Should Use

The companies partner with many brands to save you money. If you buy anything from their partner brands, then they can offer you rewards. It is that simple.

How Do I Make Money Through a Cash Back App?

To make money through a cash-back app is simple. All you need to do is simply shop through the links provided by the app. This will then take you to their partner brands. When you buy anything from those brands, the app will know and compensate you accordingly. 

https://dollarsprout.com/best-cash-back-apps/

This may be with money, vouchers, or points. Either way, it is a bonus for you. 

The 3 Best Cash-Back Apps

Here we will run through the top 3 cash-back apps to help save you time and money.

Capital One Shopping

The Capital One Shopping app is completely free to download and quickly becoming the biggest cash-back app. 

It offers several ways to save money. These include finding the best price for an item. If someone finds an item that you are looking at for a lower price the Capital One app will alert all of its users. This saves you the hard task of shopping around for the best deals.

You can alternatively simply scan a barcode and if the product can be found cheaper elsewhere the app will let you know.

The app automatically applies any coupons that it finds when you are checking out. This again saves you time (and hopefully money).

By using and shopping through the app, you earn points. These points can then be saved and used to buy gift cards to spend at a variety of brands.

Dosh

Using Dosh means that you earn money completely automatically. Dosh has major partners such as ASOS and Walmart, meaning that you can save money at places where you would normally shop. You will not need to go out of your way to spend money at lesser-known brands.

You simply need to link your card to your Dosh account and then when you spend money with your debit card, the Dosh app is notified.

There is almost no effort on your part! 

However, Dosh also offers rewards for hotels. With over 60,000 participating locations worldwide, you can be sure that you are taking advantage of the app without going out of your way.

The final way to make the most of the Dosh cash back app is to refer a friend. You will have your own referral link to give to friends and when they sign up, you will earn a fixed amount.

Once your account reaches a minimum of $25, you can choose to transfer the money to your Paypal or Venmo account. Alternatively, you can donate to charity. The choice is yours.

Fetch Rewards

Fetch Rewards has your grocery shopping covered. If you prefer to shop physically in the store (and have a little extra time on your hands), then this is a good choice for a cash-back app.

You simply shop as normal and if you shop from a store that has partnered with Fetch Rewards, then you can claim rewards. You just have to scan your receipts into the app. 

They partner with some of the biggest named brands such as Kraft, Knorr, and Lipton.

If you prefer shopping online, you will simply need to upload the receipt emailed to you instead.

Summary

Cash-back apps are a great way to save yourself a little bit extra. They help you to claim rewards for purchasing everyday items and shopping at stores where you normally would anyway.

These rewards can then be accrued to earn cash in the form of a transfer, vouchers, or even gift cards.

The ease of use of these cash-back apps means that you can spend more money on the things you love.

Image credit:[Pasja1000]

How to Plan Long-Term Financial Goals

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Being financially stable in life can open up opportunities and allow you to live your life free of stress. Although many people find it easy to plan for short-term financial goals, such as saving up to buy a new TV, it can be a lot more difficult to think about goals and plans for the long-term.

Typically, long-term goals are seen as achievements anywhere between 5-10 years from the present moment. An example of these types of goals would be saving up for a college education or buying a new home.

Basically, think of long-term goals as more expensive and more serious purchases (or investments). 

By having long-term financial goals you will also find that how you view money in the now changes.

The best place to start is by thinking about where you want to be in five years’ time. Where do you see yourself? Will you still be working? Retired? Buying a house? Raising children? Knowing the answer to this question will help you to better understand your situation.

Work Out Your Living Expenses

Once you know what your financial situation will be in the long term, you should start to think about how much you are going to need.

If you are going to need a large sum of money, then you are going to have to put a lot of money aside now. If you plan to retire and live cheaply then you can save less. You should set realistic goals that are personal to you and your lifestyle. 

https://www.forbes.com/sites/lawrencelight/2021/05/30/how-to-make-a-long-term-financial-plan/

For example, the average amount that people are recommended to save for retirement is 10%-15% of their income. This should give you a ballpark figure to know how you compare to the average person.

If you have any debts that need to be paid off then you should consider them, too. They are essential expenses and you should think of them as such. 

How Do I Achieve My Long-Term Financial Goals?

One of the best ways to make sure that you keep on track for achieving your long-term financial goals is to have motivation behind reaching them. It is all well and good to say “I want to pay off my debt”, but if that is the only motivation, your progress will decrease quickly and dramatically.

Instead, think about what else this can achieve for you. For example, if you pay off your debt you can stop paying interest. This means that you can have more money to spend on clothes, furniture, days out, etc. You can start saving up for a holiday or a wedding.

One of the easiest ways to do this is to enlist the help of a visual tool, such as a graphic organizer.

Essentially, they work the same way as a mind map. You write your major long-term goal in the middle (e.g. I want to pay off my debt) and then you sit and think about all the other ways that this goal will have an impact on your life. 

We can become unmotivated when things are too far in the future—that is why a lot of people struggle to save money in the long run. We find it easier to think of things we can buy if we save up a few hundred dollars, but saving up to buy a house in 10 years seems impossible, or not important enough right now at this moment. 

Create Smaller Goals to Get You There

By creating smaller and more manageable steps, you can connect the here and now to the future.

By creating a series of smaller goals you will find that you are led to your long-term goals without getting distracted or sidetracked.

Learn to Prioritize Your Goals

It is unlikely that most of us will have just one long-term financial goal to work toward. Often, we will want to buy a house, have children, send those children to college, and then retire. All of these desires can be costly and expensive endeavors. That means that you can easily become confused or misled when trying to reach these goals.

The best way to stay focused as life becomes chaotic is to know which ones are the most important. For example, if home prices in your area are not ideal, prioritize saving for the kid’s college fund.  

Consider Your Other Savings

Not only should you consider what are the big goals that you need to save for, but you should also always allocate a little extra money to an emergency fund. This way if there are any unexpected problems in life, even as minor as the boiler breaking down or as major as a pandemic making you redundant, you will not need to touch your savings for your goal.

https://www.clevergirlfinance.com/blog/ten-steps-to-creating-a-solid-financial-plan/

Depending on how major or minor the unexpected occurrence, your hard work could be wiped out. For example, if you have spent years saving for a house deposit and then become seriously ill, you could find yourself needing to dip into your house deposit savings to cover your medical expenses.

However, if you already have a money pot of savings set aside for emergencies then this means that you are more likely not to ruin your hard work.

You can still reach your long-term financial goals without having to worry about the unexpected. 

The best way to do this is to visually see everything. Many people find spreadsheets incredibly helpful. They can write down what the goal is, e.g. wiping out their debt, and then write down the amount of money that they have left after general expenses each month.

They can then allocate a proportion of this money to the “wiping out debt” account. This gives you a clearer picture of the exact time frame that you are looking at and exactly how much money you will need to do so. 

Conclusion

Whatever your long-term financial goals, you should always consider how realistic they are. Once you have an idea of how much money you will need and how much time it will take, you can start to budget accordingly. 

Writing down a priority list to focus on the most efficient goal is also an easy way to avoid distractions as you save.  

This reinforces the idea that what you do now matters in the future. If you need to write down all of the positives that achieving your long-term goals will give you. This way you can ensure that they seem more real and achievable.

Image credit: [KAROLINA GRABOWSKA]