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How To Save For Emergencies

Posted by in Budget
3
Nov 2015

Saving a large sum of money seems daunting, but it’s far less scary than facing a situation where you need to make emergency purchases and you don’t have many options. Everyone, no matter what their situation, is able to save some money, as long as there’s income.

Making Budget

In this article, we’re going over the small steps you can take to improve your financial health and sleep easy at night.

Have a budget

Budgeting is hard work, and is such an important skill that many financial institutions pay large sums of money to hire employees to balance their budget. Although the finances of most people aren’t quite as complicated, it still requires skill to estimate how much you’re going to spend in the future. To start, you should track all certain expenses, such as rent, the phone bill, utilities, car insurance, etc. Then add the extra expenses in their respective categories (entertainment, food, gifts, and the like).

Cut back on spending

Just like a diet, you shouldn’t try to make drastic changes immediately and expect them to stick. Make minor adjustments a month at a time. Here are a few suggestions on how to save money slowly:

  • Bring your lunch to work one day a week
  • Ride your bike to work on nice days, if you live close enough to work
  • Make your own coffee at home, and only buy it as a treat
  • Make a list of necessary purchases, and try to stick to it

Another big way you’re losing money is through services which you pay for without using. Things that fall under this category include unused gym memberships, unnecessary insurance, and telecommunication bandwidth that’s not consumed. Cancel or scale down to the minimum level of service required as soon as possible.

Bank smart

There are ways that your financial institution helps you save. Automatic savings programs will transfer amounts from your checking account into your savings account, which you should keep safe until the emergency actually arises. Some accounts have high interest rates, giving you an incentive to keep saving. It’s best to speak to a teller or bank representative as they will be able to offer you a better look at your options. It is also important to remember that a high interest account may also have penalties if you cash them early so it is important to think about what your savings funds is for. This way you don’t end up spending more then the interest you earned.

Saving for emergencies is possible for people who aren’t also facing immense debt and credit issues. If you’re near insolvency, you are already facing an emergency — and it’s a financial one. Sometimes just trying to pay off what you can isn’t the best way to solve the problem, in which case it’s best to consult an expert who will help you. Contact us today to learn more about how we can help.

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