It is very difficult to save emergency money when one is on a tight budget, and the only answer to this problem is to maintain self control at all times. If one's budget is a little looser, setting aside emergency money may mean simply setting up a special account that will hold the money in order to remind the account holder what the money is for. Most people find that setting up automatic transfers from a checking account into the emergency account is a good way to reduce temptation, but this can be a bad solution if there is a chance that this strategy will cause financial hardship. Saving up emergency money must not itself create an emergency, as this defeats the purpose of the fund.
People who have more income than they need in a month are usually already in the habit of setting some money aside for larger purchases or possible disasters. In this case, saving emergency money simply means giving that money a purpose. An emergency fund is a much more difficult prospect for a person who must tightly budget his or her money in order to make ends meet every month. Unfortunately, an emergency fund is also much more important for a person on a tight budget because this type of person generally does not have many luxuries that can be forgone in a given month should an emergency arise.
The key to saving emergency money is to separate that money from the rest of one's money in some way. Many people use a savings account for this purpose as it is often more difficult to withdraw money from this type of account. Temptation to spend the emergency money is the main reason it is difficult to save this type of money. Psychologically, it seems like the money could be better used in the present. For many people, it is better to simply pretend that this money no longer exists.
Contributing to the emergency fund from every paycheck is ideal, but this is not always possible. Making small contributions on a regular basis can add up over time. The emergency fund typically need be no larger than the amount of money necessary to live comfortably for three months, but even a relatively small amount can be a lifesaver in certain situations, so it is always worth saving. Writing down one's budget and including contributions to the emergency fund can be a great way ensure that one will not suffer any significant hardship by saving up money. It is much worse to have to break into one's emergency money due to an overly strict budget than it is to simply not contribute until one's finances straighten out.
