7 Ways to Find Money, Build Savings
You’ve probably read some of the headlines about how little many Americans have in savings. A Federal Reserve study, for instance, found that 46% of adults would find it challenging to cover a $400 emergency expense.
Having emergency savings lets you ride out crises – a car breakdown, an unexpected medical bill, a broken water heater – without using your credit card and racking up costly interest payments.
It’s also less stressful to know that you have a cash cushion.
Slow, Steady Build
One rule of thumb is to have savings enough to cover three to six months’ worth of expenses.
That’s pretty daunting.
If your emergency fund falls short, you can take steps to get on track and build a more secure financial future for yourself and your family.
Know that it’s not an overnight process, but a slow, steady build.
Here are Seven Strategies
1. Examine your spending. Track every cent that you spend for a month. Then examine what you can live without, whether it’s fewer restaurant meals or opting for public transit instead of using your car. Cut the waste and save those dollars, even if it’s only $5 or $10.
2. Save windfalls. Every time money lands in your lap – from a side job, a tax refund or a lottery ticket – send it directly to savings rather than splurging. And each time you get a raise, save that money instead of enhancing your lifestyle.
3. Side gigs. Build your savings by taking a side job, whether that’s teaching yoga on weekends or doing temp retail work during the holidays.
4. Pay yourself first. If you find it hard to save, automate the process by having a set amount taken directly from your account and sent to savings. Liberty Bank can help you with its “Pay Yourself First” account. See article to the right.
5. Sell what you don’t need. Sell your excess stuff at a garage sale, on eBay or at a consignment shop.
6. Cut energy use. Reduce your energy consumption and utility bill by using programmable thermostats, lowering the temperature on your water heater, and changing light bulbs to LEDs. Look for the Energy Star label when you’re replacing appliances and electronics. They’re more energy efficient than standard models.
7. DIY cleaning. Make your own cleaning products with basic things like baking soda, vinegar, and borax. They’re less expensive and healthier than store-bought products.