How to build an emergency fund using budgeting apps

May 13, 2023 Coin Telegraph

Track your expenses and savings goals using budgeting apps to build your emergency fund.

Building an emergency fund is a crucial part of financial planning. With the help of budgeting apps, it has become easier to save money and build an emergency fund. This article will discuss the characteristics of an emergency fund and general steps to building an emergency fund using budgeting apps.

What is an emergency fund?

An emergency fund is a pool of money that you set aside to cover unexpected expenses or income loss. It acts as a financial safety net and can help one avoid debt or financial hardship in case of an emergency. The following traits describe an emergency fund:

Liquid: An emergency fund should be readily available and liquid so that you can get to the money fast if necessary. This is why the majority of monetary experts advise putting your emergency fund in a money market or high-yield savings account.
Adequate: Your unique situation will determine how much money you need in your emergency fund. Nevertheless, the majority of experts advise keeping three to six months’ worth of living expenses in reserve as an emergency fund.
Separate: Maintaining separation between your emergency fund and other savings or checking accounts is crucial. This will stop you from unintentionally using your emergency funds.
Regularly replenished: If you do spend your emergency fund, it’s critical to quickly replenish it. To ensure that your emergency fund is prepared for the next unforeseen expense, set a goal to rebuild it.

Always manage your own money.

You should surround yourself with a team of people smarter than you, but you make the decisions.
— Dave Ramsey (@DaveRamsey) April 27, 2023

Steps to build an emergency fund using budgeting apps

Here are some steps to build an emergency fund using budgeting apps:

Set a savings goal: Find out how much you need to put aside for an emergency fund. Save at least three to six months’ worth of living expenses, according to experts.
Track your expenses: Utilize a budgeting tool to keep tabs on your spending and find places where you may make savings. This will allow you to save more money for your emergency fund.
Automate your savings: Set up automatic transfers from your checking account to your emergency fund savings account using the app to automate your savings. This will force you to prioritize saving money for emergencies and make sure that you regularly add money to your emergency fund.
Use the app’s savings features: Some budgeting apps have built-in savings features that can help you save money faster. For example, some apps round up your purchases to the nearest dollar and transfer the spare change to your emergency fund.
Review and adjust your budget: Regularly review your budget and make adjustments as needed. If you receive a raise or bonus, consider increasing your automatic savings contributions to your emergency fund.

Budgeting apps that may help build an emergency fund

Here are a few examples of budgeting apps that can help you build an emergency fund:

Mint

With the help of the free budgeting tool Mint, you can keep tabs on your spending, make a budget, and establish savings targets. You can monitor progress toward your savings objectives and set up automatic transfers from your checking account to your savings account. Additionally, Mint provides reminders when budgets become exceeded or when a bill is due, which can save you money by preventing unforeseen expenses.

5. Mint

Personal finance management app to track spending, create budgets and manage bills.https://t.co/Fkmst2H13F
— Kunjal Kanabar (@kunjalkanabar) May 8, 2023

YNAB (You Need A Budget)

YNAB is a paid budgeting app that assists with creating a budget and tracking expenses. It offers an “Age of Money” feature that predicts how long funds will last. The app encourages assigning every dollar a job, such as allocating money for an emergency fund. Savings goals for the emergency fund can be set and tracked.

PocketGuard

PocketGuard is a free budgeting tool that allows users to track their spending and create savings objectives. Users have the option to set up automatic transfers to savings accounts and construct a budget. The app provides alerts for reaching the budget cap and approaching bill due dates. The “In My Pocket” function shows the available money to put into the emergency fund.

EveryDollar

The free budgeting tool EveryDollar was developed by Dave Ramsey, a personal finance expert. Its feature called “Baby Steps” walks users through the process of creating an emergency fund in addition to allowing users to set and track budgets. EveryDollar also offers information on spending patterns and opportunities for savings to increase the emergency fund.

Personal Capital

Personal Capital is a free app that can help track spending, create a budget, and set up savings goals. It also offers tools for investment planning and retirement savings. With Personal Capital, users can see a breakdown of their net worth and set up automatic savings transfers to an emergency fund.

How to financially prepare for a recession

March 29, 2023 Coin Telegraph

Coin Telegraph

To stay recession-proof, build an emergency fund, cut expenses, diversify investments, pay off debt and enhance your skills.

A recession is a period of economic decline that can impact individuals and businesses alike. It’s important to take steps to prepare for a recession to help minimize the potential negative impact on your finances. Here are some strategies to consider:

Build an emergency fund

Building an emergency fund is one of the most critical steps to take to prepare for a recession. One may aim to save at least three to six months’ worth of living expenses in a separate account. This money can be used to cover their basic expenses in case of job loss or other financial hardships.

8 lessons for life:

1. Health over wealth
2. Know when to pivot
4. Become self-sufficient
5. Invest in you education
6. Pick your battles wisely
7. Have an emergency fund
8. Build several income streams
— M O R E (@OwnFoundations) March 24, 2023

During a recession, losing a job and struggling to find a new one is a possibility. Without an emergency fund, relying on credit cards or loans to pay bills and living expenses can lead to accumulating debt and financial stress.

On the other hand, having an emergency fund can provide one with a safety net to cover expenses during unemployment. This can help individuals avoid taking on high-interest debt and provide peace of mind during a challenging financial time. By building an emergency fund, one can better weather the economic fluctuations and safeguard their financial well-being.

Pay down debt

Paying down debt is another critical step to take in preparation for a recession. The less debt one has, the more financial flexibility they’ll have during tough times. One can start by paying off high-interest debt first, such as credit cards or personal loans.

Related: What is network effect?

By paying down debt, individuals free up cash flow that can be used to cover necessary expenses or invest in more stable assets.

Cut back on discretionary spending

Reducing unnecessary expenses can free up more money to put toward building one’s emergency fund and paying down debt. Consider cutting back on dining out, entertainment and other non-essential spending to save money.

Additionally, minimizing discretionary spending can help individuals avoid accumulating high-interest debt, which can further strain their finances during a recession. By living below one’s means and focusing on essential expenses, they can better weather economic downturns and protect their financial well-being.

Diversifying investments

Having diversified investments across multiple asset classes can help protect one’s portfolio from market volatility and potentially reduce risk.

Therefore, investing in a variety of assets, such as stocks, bonds, cryptocurrencies and real estate, can help mitigate the risk of a recession. Diversifying one’s investments can provide some stability during an economic downturn.

Consider your job security

It’s crucial to evaluate your job security and look for ways to increase your income or improve your skills to make yourself more valuable to your employer.

Recession Proof! pic.twitter.com/EBP0PVUhvd
— Gus (@wallstgoat) March 24, 2023

This could mean taking on additional responsibilities or seeking out additional training or certifications to make yourself a more valuable employee.

Are cryptocurrencies recession-proof?

Cryptocurrencies are not entirely recession-proof, as they are still subject to market volatility and economic downturns. While some proponents of cryptocurrencies argue that they offer a hedge against traditional investments during a recession, there is still a high level of uncertainty and risk involved in investing in cryptocurrencies.

During a recession, cryptocurrencies can experience significant price fluctuations, which can lead to substantial losses for investors. Additionally, because cryptocurrencies are a relatively new and unregulated asset class, they are vulnerable to market manipulation and fraud, which can further increase risk.

That said, some investors may still view cryptocurrencies as a potential recession-proof investment due to their decentralization and potential for long-term growth. However, it’s essential to remember that cryptocurrencies should be considered a high-risk, speculative investment, and investors should approach them with caution and do thorough research before investing.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

Crypto lender Genesis has no solution yet for withdrawal halts

December 8, 2022 Coin Telegraph

Bankruptcy

Genesis said it will take additional weeks to carve out a recovery path for its lending business.

Crypto lending platform Genesis has informed its customers that its withdrawal freeze is likely to last “additional weeks” amid efforts to stave off a potential bankruptcy filing.

In a Dec. 7 letter to its customers shared by Genesis to Cointelegraph, interim CEO Derar Islim — who took the temporary helm of the company in August — said it will be weeks for them to formulate a recovery plan that could see withdrawals reopened, stating:

“At this point, we anticipate that it will take additional weeks rather than days for us to arrive at a path forward.”

The letter also stated that Genesis is “working in consultation with highly experienced advisors” and are “evaluating the most effective path to preserve client assets, strengthen our liquidity, and ultimately move our business forward.”

“All other Genesis entities remain fully operational,” the letter added.

Genesis Trading, the market maker and lending subsidiary of Digital Currency Group (DCG) first flagged exposure to FTX in a Nov. 10 Twitter thread, revealing that it had $175 million in funds locked on the FTX crypto exchange.

DCG attempted to bail out Genesis with a $140 million cash infusion that same day.

However, this didn’t appear to be enough to resolve its liquidity issues, as Genesis Global Capital froze withdrawals on Nov. 16 citing "unprecedented market turmoil" caused by the collapse of FTX, which led to “abnormal” levels of withdrawals that exceeded its liquidity.

On Nov. 21, the crypto lender denied plans to file for bankruptcy “imminently” after failing to cover a reported $1 billion shortfall in its balance sheet.

Shortly after on Nov. 22, Genesis confirmed that the firm hired investment bank Moelis & Co for restructuring services as a means to avoid the Chapter 11 route.

In the letter, Genesis reaffirmed that it is “committed to being as transparent as possible” to those affected and that customers will be informed of “meaningful developments, including any updates on timing.”

Emergency Fund