At any given moment, an emergency may appear that necessitates a rapid influx of cash. Preparing for these unanticipated scenarios is a matter of storing up an emergency fund—a cache of readily available resources to help you get through until normal operations can resume. Here are some clever and straightforward ways to help you accumulate that emergency fund:
1. Make a Money Jar:
– Take a large envelope, cookie jar, or any other inexpensive container and set aside a meaningful sum of money in it weekly. The envelope process is simple. Take a week and set aside a sufficient amount of money that you won’t miss at the end of the week. At the end of the week, you’re still in the week. You can use the money-jar process without feeling bad or constrained.
2. Provide Yourself with a Gratuity:
– When you dine out, give yourself the same amount as gratuity that you would give the waiter. This could be 15-20% of the cost of your meal. When you return home, contribute that amount to your emergency fund.
3. Purchases That Earn Cash Back:
– When you use your debit card, always choose cash back. (Just pretend you’re actually withdrawing the money and then putting it straight into your savings.) These small amounts, like $1, $2, or even $5 add up quickly and can be a source of surprise savings for you.
4. Establish a Shadow Payment:
– If you reward yourself with a new automobile or a trip, keep making that “shadow payment” into your savings account each month. That way, you can save without feeling the squeeze.
5. Become a member of a Christmas Club:
– A number of financial institutions offer Christmas clubs. You commit to depositing a certain amount each month and, by the end of the year, you have a holiday fund that, in some cases, earns interest.
6. Savings from Weekly Grocery Shopping:
– If you normally allocate about $15 to your weekly grocery shopping, take that same amount and put it in your savings jar. Over time, this can add up to a rather substantial sum.
7. Savings from Your Tax Refund:
– When you get your tax refund, think about having it deposited straight into your savings account. Doing this not only allows you to inflate your emergency fund but also removes any opportunity you might have to spend your refund instead of saving it.
8. Utilize Reward Credit Cards Wisely:
– For a credit card that gives you cash back, use that for your regular monthly spending. Then take your cash-back rewards and pay them into your savings account.
9. Coin Jar:
– Maintain a sizable jar in your kitchen for the collection of leftover coins. Each day, pour your pocket’s worth into the jar. On top of that, you might want to consider adding a bill at the end of every week—maybe a 5 or 10—that could also substantially increase your savings.
10. Eliminate Extraneous Spending:
– If you have a routine that consumes money, such as smoking, think about toning it down or giving it up. Take the cash you would have used to fund your bad habit and direct it into your emergency fund.
If you patronize a laundromat, save a coin each time you go there to wash your clothes. This little move is actually a pretty smart way to save laundry-related coins, which can really add up over time.
12. Compensate Yourself for Late Fees:
– If you are going to incur late fees, then do the sensible thing and pay yourself that amount instead. It’s a way to save money that you would otherwise lose.
Reflecting on Weight Loss:
– For those attempting to shed pounds, putting a dollar into your jar for each workout or healthful meal you consume can be a serious motivator while also serving the dual purpose of making your next splurge a little less guilt-inducing.
14. Fund for telephone calls:
– Put a jar beside your phone. Every time you pick up the receiver, drop a small amount into the jar. This will add up to a nice little fund over time.
Conclusion
Unpredictable though they are, emergencies can take a toll on finances. That makes having a plan in place to deal with the costs of unforeseen events all the more necessary. Following these straightforward steps will allow you to build a fund for just such occasions and, with the cushion it provides, help you face life’s unexpected moments.
