How to Build Your Personal Emergency Fund
Do you have a personal emergency fund? Surprisingly, many consumers do not have an emergency fund to back them up during times of crisis. And when the recent recession hit, many families were seriously stricken by the unexpected fall of the market.
Whether or not you are experiencing difficult situation, you should strive to build a fund for emergencies. Some people may reason that they do not earn enough to even set aside savings. But regardless of how much you earn each month, you can build your savings if you really make an effort to do it.
Listed below are tips on how you can build your personal emergency fund even if you live from paycheck to paycheck.
1. Build your motivation. It’s important to build a strong determination so you can strive to make an effort even though it’s difficult. So where do you find motivation? That really depends on your personal situation.
For instance, for a parent or parents with kids, saving for their children can be their most powerful encouragement. If you dream of owning a house, then that can be your biggest encouragement.
2. Save the smallest cents. Instead of thinking that you don’t have money to spare, you should pay attention to the details. Make a detailed list of all your expenses each month. Be sure to include even the littlest costs. Add up everything and compare it with your earnings. By looking at your list, it’s easy to see whether you’re living beyond your means or if certain adjustments can be made.
Create a new budget list. This time, carefully check the areas where you can spend less. Cross out items that you can live out (ex. magazine subscriptions). With your new list, compare the total cost to your earnings and see if you can get extra money you need to contribute to your savings. Don’t disregard the small cents. When put together, those cents can make a big difference.
3. Shop around before buying. Before making a purchase, take the extra time to shop around and compare whether you’re shopping online or offline. The same principle applies when looking for loans, insurance plans, or credit cards. Do not make decisions in a rush.
4. Bring a shopping list. Before going to the supermarket, plan ahead. The night before, create your shopping list so you can better determine which items you need to buy. It also helps to plan your meals for the week so you’ll know which products to buy in bulk. Jot down your estimate budget for each item on your list and bring only the exact amount you need.
Pay your bills on time. Make it a goal to pay your utility bills and credit card bills on time to avoid late penalties. If you own a credit card, be sure to pay off your balances in full before your due date ends. Use the money you save by not paying interest rate and late fees to contribute to your emergency fund.
About the Author
Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit cards to people with bad credit.
Processing your request, Please wait....
