4 Ways to Save for an Emergency Fund
No one is able to go through life without running into some kind of financial difficulty. While no one plans to become seriously ill or injured, lose their job, or suffer a misfortune such as a natural disaster, these events can happen to anyone. A smaller emergency, such as a minor illness or having your hours cut at work for a few weeks happen to just about everyone at some point. That’s why it’s so important to have some money saved for these events.
If you’re struggling to pay all of your bills every month, however, saving up some emergency funds can seem like an impossible task. Fortunately, there are things you can do to get started.
- Save your change. At the end of each day, empty the spare change from your pockets or purse into a jar. As soon as the jar is full, deposit the money into a savings account that is designated for only an emergency. This method may only net you a few hundred dollars a year, but if you’re living without any savings, it is a good way to get started. This small amount can pay for a small car repair or cover a particularly large utility bill.
- Get a debt consolidation loan. If you’re trying to cope with large credit card bills, these loans can help. They combine all of your cards together into one loan, wiping out your credit card debt. Then, they offer you a lower interest rate, allowing you to save money every month while making progress on paying off your debt. You can take the money you save and dedicate it towards your emergency savings. As an added bonus, the fact that you’re paying less every month on your bills means that you won’t need to save as much money to cover your bills in the event that you can’t pay them.
- Cut back on your other bills. Reducing your cell phone plan, saving energy around the house, and turning off the cable are all ways that you can reduce the amount that you pay ion your other bills. Again, take the money you save and dedicate it towards an emergency fund.
- Make your own food. Grocery expenses are one of the larger bills in many American families. Cut back on them by avoiding processed foods. These foods are some of the most expensive (per calorie) in the grocery store. Instead, by fresh produce and meat and learn how to make your favorite foods at home.