Malaysians' financial status in 2022 was at its worst compared to the last five years, as reported by Asia News Network . Yet many of us still failed to realise the importance of having an Emergency Fund. The fund acts as a safety net just in case of a crisis.

Nowadays, Malaysians are very vulnerable to the financial crisis, a recent survey by  RinggitPlus found that 70% of Malaysians do not save at all or saved less than RM500 monthly.

Some of the reasons to set up an emergency fund are - you can take cover during emergencies like accidents, give financial flexibility, avoid you taking on debt in case of emergencies, for you do not have to rely on others for help, and you do not have to take out your investments.

Therefore, you need to know how to start saving for your emergency fund during this economic uncertainty. Here are several ways that may help you:

Open separate savings account for your emergency fund

Having a different savings account specifically for your emergency fund will help you not to get confused about the purpose of the funds. Do research beforehand to know which bank offers a higher interest as it will help you earn more for your savings.

Determine your emergency funds goals

Keeping track of your expenses, such as housing, transportation, and food, will enable you to plan an accurate monthly budget. Add all your expenses and multiply them by six. That total amount is what you need to cover six months of your expenses. Why six, you may ask? You might think it is a lot, but think of it this way: If you lose your job and can’t find another job immediately, you can be sure that you are still financially secure for at least three months. You can also read more about the  unexpected economic crisis and how to prepare for it.

Cut out unnecessary expenses

Consider cooking more at home or reducing shopping for unnecessary items online. For example, it would help if you avoid buying coffee from some fancy coffee chain store or eating out every day. Minimising the amount we splurged on entertainment that could put some weight on our finances. Look for entertainment that is less hefty in your pocket.

Pick up extra income

Look for side hustle opportunities. The money you earn from doing side gigs can help boost your savings. Nowadays, there are many ways you can start making money from working online in the comfort of your home.

Sell your unwanted belongings

Some of your old belongings like books, clothes, and shoes can be sold online as vintage or second-hand items. Things you want to declutter may still have some value. You can sell those unwanted items online. Remember, somebody else might want the things that you want to discard.

Use Pay4U

Pay4U lets you pay your commitments without sacrificing your cash on hand. The money that you have can be put aside for your emergency funds.Pay4U allows you to pay your monthly expenses such as car loan, house loan, credit card bill, insurance, motorcycle loan, personal loan, PTPTN, rentals and tuition fees via credit card. You can also use Pay4U to pay invoices, rent, and salaries for your business. No more late payments. Your payment will be processed within three to five working days.