An emergency fund is an essential part of any financial plan. It’s a bank of money that you can withdraw from during unexpected financial struggles. Having an emergency fund can help reduce stress during difficult times and give you peace of mind knowing you have a backup plan.
If you don’t have an emergency fund yet or want to start building it up, you can use on-demand pay to help yourself out. On-demand pay is a way to access your earned wages before your scheduled payday. It can be a great tool to help you start building your emergency fund.
And guess what? It is very easy to use the on-demand pay solution to build your emergency fund with us. In this article, you will be reading about what on-demand pay and emergency funds are and how to use on-demand pay to build an emergency fund for yourself. So, let’s get into it.
What is on-demand pay?
On-demand pay is a technological finance solution that allows employees access to their earned salaries before payday. It helps employees get paid earlier than the normal end-of-the-month salary payments. Several platforms offer this solution but let’s tell you about how our on-demand pay solution works here at Earnipay.
As an employee, once your employer has enrolled you on our on-demand pay system, you will be able to access 50% of your earned salary after working for at least 5 days in the month. So, if your 5-days salary is #50,000, by the end of the fifth day you can withdraw #25,000 from our platform. Clear? Clear.
So, what is an emergency fund? An emergency fund is a bulk of money specially saved for unforeseen and urgent financial expenses. Examples of these needs are medical and health bills, home repairs, unplanned travels, accident repairs, family needs, etc. Remember those ‘rainy days’ funds you set aside to ease your financial stress at some point in time? Yeah. This is exactly what an emergency fund looks like too.
However, the biggest part of building an emergency fund is getting the money to save up for it. Having thoughts on building emergency funds several times before now is good, but it would be better to actualise them by truly saving up for your emergencies. Hence, the need for a comfortable finance source like the on-demand pay solution to get it all done.
Now, let’s get to how to use on-demand pay to build an emergency fund. Follow these steps closely.
- Evaluate Your Income: The best way to financial freedom is brute honesty with yourself. The first step to deciding on how much to build your emergency fund with depends on your level of income too. Hence, it is better to checkmate your level of earnings first and decide how much you can afford to set aside for your emergency fund from your earned salary.
- Make A Budget: After evaluating your income level, it is best to practically draft out its distribution for proper sharing. Get your budget written out from the mental notes you have made while evaluating your income for more clarity and a better decision-making process. You can even adjust your specific budget for an emergency fund appropriately after seeing the weight of other items on your budget.
- Set Up A Separate Bank Account: Your emergency fund is safer when it is out of your frequent reach. It is better to use a specified bank account to save up for your emergency fund. Why? Out of sight is usually out of mind. The more you see your funds lying in your regular bank account, the higher the chances for you to spend out of the lot.
So, create another account for your emergency fund to strengthen your discipline towards its safety and link it to your regular account. Online banks are good options for this as they allow you to create and operate your account remotely without wasting time at traditional banks.
- Use Automatic Savings: From here, everything gets easier. The essence of income evaluation and budgeting is to know exactly how much you can lock away in your emergency fund account. Doing these makes it simpler for you to set the specific amount that goes into your emergency fund account with your preferred frequency.
For instance, if you want to save #1,000 every week in your emergency fund bank, the automation makes the withdrawals easier and stressless for you. Also, you won’t have to worry about saving too much as you get accustomed to the weekly deductions without you even initiating them.
- Use On-Demand Pay: Remember, money is a big player on the emergency fund-building pitch. And we know how hard it is to sort emergencies that come during the month when you have to wait till the month’s end for your paycheck. Also, we know that setting money aside on payday for emergencies is even harder when you have loans to sort out and debts to pay.
Therefore, we at Earnipay thought out the best way to ease your struggles with financial emergencies which are building an emergency fund even before you need it. With our on-demand pay solution, you can get a good part of your earned salary timely and save parts of it up for rainy days.
By accessing a good part of your salary before payday, you can actualise your financial budget and save up for emergencies before they even happen. You get to avoid loan interests that suck a good part of your income before it arrives. This way, you have a whole and timely income to gradually build your emergency fund from.
Bringing This To A Close
If you want to get more comfortable with your emergencies, now you know building an emergency fund is important. And if money is the major hurdle you have to jump, we are right here with our on-demand pay solution to jump it with you.
We encourage you to share this on-demand pay solution with your employer so they can get on the system and enrol you too. From here, your emergency fund building would get easier, faster and better.