By Dave Plunkett
Like always wearing clean underwear in the unlikely event you get rushed to the hospital emergency room, saving money for a future emergency is something we’ve all been warned about. Sounds simple enough – we save money now so we can bail ourselves out of any major disasters in the future. The only problem is coming up with the extra money to tuck away. Statistics show that more than 25% of all Americans do not have access to $1,000 in cash, leaving them open to economic collapse in the case of a medical incident, layoff or car problem (to name just a few things that can ruin our daily routines).
Even though it’s almost been a decade since the great American economic meltdown, it’s still a time of economic insecurity. Most people are still rebuilding to get back to where they were financially in 2008. Despite the lack of excess cash, every American needs to have an emergency fund for life’s surprises. Financial experts recommend that most people keep at least $1,000 on hand for emergency expenses like car repairs, emergency room visits, leaky roofs or any other of a thousand reasons you may need some extra cash now.
Economic guru, Dave Ramsey sums up the importance of emergency funds with this sensible statement: “The reason to have an emergency fund is simple: You don’t know what’s going to happen.” That straightforward philosophy should be enough of a logical argument to motivate you to start your emergency fund today…or at least at your next paycheck.
Emergency funds are your buffer against a cruel world where money talks and broke people go without. Starting and maintaining your own emergency fund will not only provide valuable resources when needed, but will also give you peace of mind. We all know anything could happen at any time and at least having some dedicated emergency funding will go a long way in helping you to feel more secure.
It is about this time in an emergency funding discussion that most people admit they are already stretched to the limit when it comes to their budget. But, if you really sit down and think about it, there are all kinds of ways in which you can provide some extra money monthly to set aside for when you really need it.
Here are seven different ways you can afford to start your emergency account:
- Eat out less. This sounds so simple and it is – but few people really realize how much money they spend eating out. Skip the $4.00 latte in the morning and drink coffee at home. Just skipping one restaurant dinner a week will add up quickly.
- Carpool or take mass transit. Commuting can be a very expensive proposition, depending upon how far you drive. If you can join a carpool or take mass transit to work, you’ll free up hundreds of dollars annually.
- Lower your utilities. You don’t need to keep your residence 70° year round. By just adding a few degrees in the summer and cutting a few in the winter will surprisingly lower your utility bills.
- Price check your insurance. Shop other insurance companies for your auto and home owner’s policies. It is amazing at how much rates vary between companies.
- Use a shopping list at the grocery store. Again, this trick will shock you by demonstrating how much food you buy that you don’t need – you only buy it because you’re hungry and not shopping with a list. If it isn’t on the list, it doesn’t go into your basket.
- Request lower interest rates from your credit card companies. Most consumers don’t know about the ability of customer service reps to offer you lower annual rates for good customers. Simply call your card’s company and ask. They might not give you a lower rate, but at least you know you tried.
- Coupons still rule. You may or may not use grocery coupons to do your weekly shopping, but if you don’t, you’re just throwing money away. While you can still do the old cut and redeem, most companies offer free electronic coupons that allow you to simply swipe your phone to get the deal. You can sign up for free weekly coupons by visiting sites like Daily Grocery Coupon: https://tinyurl.com/yc6e8nue or any of the numerous digital coupon distributors. Just try this for a couple of weeks and watch how much money you can save every time you shop with coupons.
Depending on your situation, you may never have an adequate emergency fund. While you’ll save what you can, your necessary monthly expenses may prevent you from saving as much as you would like, you should be able to afford something to put into your emergency account on a monthly basis.
Out of Sight, Out of Mind
If you are like most people, keeping your emergency money out of sight will help you with having to fight your compulsion to spend the money on fun things like travel, electronics, and travel. Open a savings account at another bank than your usual one. That way, it will truly be out of sight and out of mind. Stick to your deposit schedule and regardless of how small amount you start with, you’ll be surprised at how fast even minimal deposits add up to when they are left alone to grow.
Include Emergency Food Storage in Your Monthly Budget
If you have already established your own emergency food storage pantry, you need to budget what you can for adding to it monthly. You can start small and just get one or two 72-Hour emergency food kits. These type of kits will provide you will all the food you’ll need to feed from one to four people for an entire month. After you have these essential survival food kits, you can then add more food, water, and gear to make your disaster food pantry.
The bottom line – celebrate National Preparedness Month by making the commitment to giving you and your family the food, water and material support your need to survive any natural disaster or weather-related event. For more information and suggestions for emergency preparedness, go to: https://www.beprepared.com/