You’ve heard of the debt snowball, but have you heard about a financial avalanche? Unlike the debt snowball it’s not a good thing. In fact, it’s something you need to know how to avoid. But no worries: You’ll be climbing the mountain of financial independence in no time, without worrying about being buried in frustration!

What Is a Financial Avalanche?

A financial avalanche is an accumulation of financial emergencies that build up and demand your resources all at the same time. Scary! They happen when you don’t pay your bills, when you accept a lower paying job, or when you build up debt. They are the residue of accumulated bad luck and bad choices.

It’s not hard to be buried by your finances. Bad decisions can pile on top of one another and, sooner or later, you’ll make one that brings everything crashing down. Yikes.

Avoiding a financial avalanche isn’t difficult. The first step, which never ends, is to constantly be a student of your finances, learning to make better decisions every day. The second step is to build your emergency fund.

How YOU Can Build an Emergency Fund

Building an emergency fund is like packing down the snow, blasting parts of steeper cliffs, or whatever else people do to prevent destructive avalanches. An emergency fund is like a massive concrete wall that blocks any avalanche headed your way.

Building that wall is as simple as following these basic steps:

1. Lower your expenses: In order to have enough money to build your emergency fund, you’ll probably have to make spending cuts, temporarily adjusting your lifestyle.
2. Raise your income: You might be able to find an extra part-time job that fits your current schedule. Work a bit harder than usual when you are building your emergency fund – you’re going to need the extra cash flow to build that avalanche wall. You can also raise your income by selling anything around the house you no longer want or need.
3. Actually start your emergency fund! That’s right, actually do it! Many people get discouraged when they realize how much money is recommended to have in an emergency fund, but don’t let this get you down. You can start with any amount — $100, $50, $10; the important part is getting started!
4. Review your budget monthly: Make sure that you are keeping your expenses low and your income high. The greater the difference between these two figures, the faster you’ll build your emergency fund..
5. Stay consistent: Keep your budget intact by not giving into big purchases. Stay committed to the goal – completing your emergency fund – and don’t stop until you’ve reached it.

One other way to help build an emergency fund is by getting cash-back perks through PerkStreet Financial. Throw the amount of money you’ve earned in perks into your emergency fund; if you spend $100 in perks, take that same amount from your bank account and put it into your emergency fund.

Don’t be overwhelmed: You can do it. And if you ever encounter a financial avalanche, you’ll be so glad you took these steps.

Related Reading: Why Every American Should Have an Emergency Fund

Do you have an emergency fund? How did you build yours? Share your advice in the comments section below.

John Frainee is a Customer Columnist here at PerkStreet, and the webmaster and a writer for the ever-growing blog, The Christian Dollar. John enjoys exploring how faith and finance interact, spending time with his wife and family, and meeting readers from all over the web. He has a Bachelor of Science degree in Bible and Christian Counseling and loves encouraging others in their financial pursuits. You can also find him on Facebook and Twitter.