How to Save Money for an Emergency
If it has not happened to you yet, keep living and you’re sure to have an unexpected financial emergency that creates a little bit of anxiety. Whether it’s your car breaking down, a plumbing problem or a health crisis, life has a way of presenting situations for which you are not prepared. This is the very reason why it’s important to consider creating an emergency fund. Having a savings account for emergencies is a way to maintain peace of mind even though challenges in life are inevitable.
When embarking upon the journey of creating an emergency fund, you don’t have to worry about not having much money, just getting started is the priority. As a matter of fact, there are many banks and other financial institutions that promote savings by offering incentives for automatic transfers into savings account. Even if you are not quite prepared to participate in this kind of program, you can choose to transfer an amount of money as small as $10 each week into your savings account. The key is to make a commitment to yourself about the nature of the funds so that you are not tempted to access those savings. As you become accustomed to transferring money, you can later automate the process and increase the amount to $30 or whatever works best for your budget.
Given the ease of transferring money these days, some people find it helpful to open a separate account into which money is directly deposited. You can also make it difficult to access the money in that account by not keeping associated debit cards, which means you have to physically walk into the bank to withdraw money. The goal is to make it difficult enough to access the money that you won’t do so unless there is an actual emergency. Even if you’re living paycheck to paycheck, it’s important not to view the emergency fund as something that can be accessed on a regular basis.
One way to increase your emergency fund once started is to examine your expenses in order to find opportunities for cost savings. By examining the statements from your checking account, you will start to get clarification on where your money goes and how you can eliminate unnecessary costs. Maybe you’re wasting money on fees by making payments late, eating too much fast food or drinking expensive coffee. If you look hard enough, there are often ways to reduce your monthly expenses and increase your emergency fund. You can also find creative ways to increase your savings, such as cashing in any silver coins in colorado or having a garage sale.
Perhaps one of the most important ways to go about saving money is to change the way that you think about money. Your relationship with money can be the underlying reason why you have been unable to save in the past. For example, when you have received unexpected money in the form of a large tax refund or a bonus at work, how you view that money will dictate whether or not you save it or spend it. Successfully increasing your savings requires you to view money as a tool used to manage your life as opposed to a resource for purchasing more things. With the prevalence of apps that can be downloaded for free onto your Smartphone, there are many tools that can assist you with achieving your goal, such as apps for finding the cheapest place to purchase groceries and other items that you buy on a regular basis.