You Have A Steady Flow Of Income.
If you have more than one source of income, then you will always have a steady flow of income. But if your wallet is filled only seasonally, or when you have an urgent need of money but you can't find any or don't have close to the amount, or in worse cases, you always borrow in other to solve that urgency then you're definitely not in good condition with money.
Let's say for example, before half of the world was in lockdown due to the world emergency, if you didn't have a backup fund or an emergency fund, backup savings, then by now you should've known how the outcome or the emergency situation treated you.
Although some governments like Canada and others offered their citizens emergency funds or rather palliatives. Those who saved emergency funds or rather backup funds were not too affected. That is in fact the reason for an emergency fund. There are several ways you can start saving for an emergency fund.
How to save for an emergency fund.
1. Know your monthly income. Then know your monthly spending.
2. Always deduct from your monthly income to save. There are several ways to create a savings account or a safety lock that gives you a limit in withdrawing daily. Most of the financial institutions that allow you to create a safe lock put some restrictions to avoid temptations from your own end.
3. Be disciplined about your monthly. Don't just spend. Spend for a reason. You will discover at the end of the year, you may have accumulated more than enough to cover so many things.
You Know How Much You Spend. Do you know how much you spent last month or last week? No? Then this category is for you. Do you know? Yes? Then move on to the next category. Keeping a track record of your daily, weekly, or monthly spending is a sign that you're in good condition with money. And it can actually help you in maximizing spends and save. The saving rule suggests you save 20 percent of your monthly income. If you're losing track of how much you spend, there are a few ways to try and be disciplined and keep records.
1. Don't withdraw more than you need. Know the things you're going to spend about.
2. Moving unnecessary money to an actual savings account or digital safe lock.
You Can Pay Your Bills Every Month. If you can pay your bills monthly without borrowing then you're good with money. Knowing your monthly bills and planning them ahead of time will help in keeping the funds needed for it.
You Can Buy Things You Want. If you can buy the things you want when you need them then you're good with money.
You Are Saving Money. If you're following the monthly spend rule which suggests 20 percent of your monthly income to be your savings. Then you're good with money. You invest More Money. You Planning Ahead For A Major Purchase.