What is an emergency economic buffer and how do you create one?

Building and managing an emergency fund could save you a lot of trouble, as having a reserve of money to cover unexpected expenses or crisis situations would prevent overspending and provide you with financial security.

The so-called "financial cushion" is a good tool to protect your money against unexpected expenses. without these representing a great impact on your financial health and personal finances.

According to the National Survey of Household Finances conducted by the National Institute of Statistics and Geography (INEGI), Only 2 out of 10 adults could successfully cope with an unexpected expense equivalent to a month's income.

What functions does an emergency fund have?

Creating an emergency fund can cover you in difficult situations such as job loss, a medical emergency or accident, as well as home or even car repairs.

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Likewise, having a savings amount will help you reduce financial stress and avoid accumulating debt that may lead you to resort to loans. It's recommended to keep it in a safe and accessible place, such as a savings account, so you can withdraw it whenever necessary without any risk.

Tips for building an emergency fund

Building an emergency fund requires effort, patience and discipline, but above all, a good planning method. Below are some recommendations to help you start building your own financial cushion:

Define a savings goal or objective: Although there is no exact figure, it is recommended to have a savings fund equivalent to between 3 and 6 months of your basic monthly expenses.

Automate your savings: Manage your savings fund properly, dedicate at least 10% of your monthly income to this fund.

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Reduce your expenses: Identify expenses that you can eliminate or reduce, that are truly necessary.

Additional income: Look for ways to generate extra income that will help you achieve your goal; any contribution will benefit your savings.

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