How to save money and create backup savings that will keep me going in case of emergency?
It is really important that we all have emergency/backup savings. In an ideal world, everyone would have six months savings in the bank, but if I had to guess, most people do not have that.
Please consider making this a goal of 2019! If this seems daunting, think about creating one week of emergency savings and build that into one month of savings. Think how good it would feel knowing you could live for one month without any cash inflow, if you had to.
After doing research, here are the suggestions I especially like and think seem reasonable to implement. Interestingly, #1 is probably how many of you got into selling online in the first place!
I also highly recommend considering #8 – SAVE your tax refund if you can.
Which one of these do you think might help you?
1. Sell something.
If you take a couple of hours to look around the house, you’ll be amazed at how many items (old kids’ toys, exercise equipment, dusty power tools, etc.) you could convert to cash.
2. Find one-time income opportunities.
There are lots of chances to do some quick work and earn bucks inside and outside your home. You can answer online surveys, care for pets while their owners are on vacation, participate in focus groups, and more.
3. Get a second job.
None of us likes the thought of pulling extra hours when we’re already tired, much less being away from our families for that much longer. But even four weeks of an extra job can make a huge difference when you have an emergency need.
4. Make cuts in your budget.
Look at your budget and do a bunch of little cuts that you won’t notice individually but add up significantly. Turn the thermostat down a degree or two, clip some coupons, and cancel unnecessary services or memberships.
5. Set a monthly savings goal.
This will get you into the habit of saving regularly and will make the task less daunting. One way to do this is by automatically transferring funds to your savings account each time you get paid.
6. Keep the change.
When you get $1 and $5 bills after breaking a $20, drop some in a jar at home. When the jar fills up, move it into your savings account. If you don’t carry cash, you could try a mobile savings app that makes automatic transfers, with rules that are based on the transactions you make.
7. Tidy up your checking account.
If there’s money left at the end of a pay period, move some into your emergency fund. If there’s no money left, cut expenses. See which parts of your monthly spending you can trim, so you’ll have cash left over to build your fund. Some ways to save include carpooling, cooking more meals at home, saving leftovers and avoiding small daily purchases such as takeout coffee.
8. Save your tax refund.
You get a shot at this once a year at tax time — and only if you expect a refund. Saving it can be an easy way to boost to your emergency stash. When you file your taxes, consider having your refund deposited directly into your emergency account.
9. Assess and adjust contributions.
Check in after a few months to see how much you’re saving, and adjust if you need to add more. This is especially important if you go through an expensive major life event such as marriage or a move to a new city, or have an emergency that causes you to dip into your existing fund.
(Nerd Wallet, Dave Ramsey.)
10. Check your insurance policies.
A real good one to find money is to check your insurance policies and rates. Ask your insurance broker to check the rates with various companies for all your insurance policies (Personal, Auto, Homeowner’s etc.). You can save hundreds off and sometimes even add coverage!
Anna Hill is the founder of Accounting We Will Go, a firm that provides accounting and bookkeeping services along with training for Amazon sellers.