If you’re worried about money, you’re not alone. According to the Federal Reserve, nearly a third of Americans don’t have enough savings to cover an unexpected $400 expense, like a car or medical emergency. This is often very stressful! You never know when something will go wrong. The best way to prepare for an emergency is to get your finances in shape and add money to your emergency fund. If you’re not sure how to start, the following are a few excellent steps to set you on the right path. 


Track Your Spending

First of all, find out where your money is going. Keep a list of all your expenses and any purchases you make, both necessary and unnecessary. It doesn’t matter how you keep track– some people prefer to use pen and paper, while others may prefer to use an app. Do all of this for a month. Then divide your expenses into categories, such as recurring expenses, rent and utilities, and entertainment. 


Create a Budget

Once you’re determined where your money is going and have a better idea of what your expenses are, you’ll need to create (and stick to) a budget. Write down how much money you earn or obtain each month. Although it sounds simple, the key is to not spend more than you earn. Otherwise you will go into debt. 


Put Away Money in an Emergency Account

When you create your budget, you should also decide how much money you want to save in an emergency account each month. Put the money directly into your emergency fund so you won’t be tempted to use it for unnecessary expenses. 


The exact amount of money that should be in your emergency fund depends on your lifestyle, however experts recommend that you have enough to cover at least three months’ worth of living expenses at any point. If you have kids or someone in your family has health problems, consider keeping at least six months’ worth of money in the account. 


If you’re struggling to save, start with a goal of $1,000, then move forward from there. 


Keep Saving

As time goes on, don’t forget to replenish your emergency fund. Once you start the habit of saving, you can also start saving for other future purchases, perhaps a home or further education.