Jumpstart Your Emergency Savings
July 25, 2012
by Lila Quintiliani, AFC, Military Saves Assistant Coordinator
New research published by Bankrate.com last week showed that 58% of Americans don’t have three months of emergency savings while a full 28% of Americans have no savings whatsoever. When times are tough and it’s hard to make ends meet, it’s difficult to see the benefits of saving, but the truth is, an emergency fund can be your lifeline, and the only thing between you and financial ruin. I have seen people go in to perpetual credit card debt because they suddenly had to buy a set of tires.
At Military Saves, our mantra is to Start Small, Think Big, and that’s exactly the way you can approach building up your emergency fund, even if you’re living paycheck to paycheck.
Here are some ways to jumpstart your savings:
Find some extra cash. You may think that your bills take up your entire paycheck, but you probably have *something* you can cut back on to put some extra cash in your pocket. Brew coffee at home instead of buying it on the way to work, pack your lunch instead of eating at the food court. Check out a DVD at the library instead of buying it or renting it. Get creative and find ways to cut back. This past week, I changed our cable package to a lower tier of programming and saved us $20 per month.
Make some extra cash. If you absolutely can’t reduce your expenses, then you need to increase your income. Sell unwanted items on Ebay or Craiglist to earn some extra dough. And I’ve known several people (adults) who made some extra cash by mowing lawns.
Put extra debt repayments on hold. While reducing debt is a great goal to have, it is not wise to pay extra on your credit card bills at the expense of your emergency fund. If you have no emergency fund, then you should consider paying just the minimum on your debts until you have an emergency savings account of $500- $1000. Then you can start paying down your debt again.
Make it automatic. Once you’ve found that extra cash to save, stash it in a SEPARATE savings account rather than the usual account you use to pay bills. Better yet, set up an automatic deposit to go into that savings account. We have a portion of my husband’s pay go directly to our savings account via allotment each month. If you can’t see it (or easily get at it!), you can’t spend it.
Additional articles to help you save:
- Painless Ways to Pay off High Interest Debt
- 5 Ways to Reduce Your Debts
- Recovering from Overwhelming Debt
- Paying Down Debt
- 5 Signs You Are In Financial Trouble
- Written by Super User
- Category: Blog
- Published: 25 July 2012