Steps to Financial Security - Baby Step #2
Posted
on Monday, January 28, 2019
in
Financial Education
Step #2
Save $1000 to Start an Emergency Fund
The basic idea for this step is to save up $1,000 as fast as possible to prepare for unforeseen emergencies. A common unexpected expense could be something like your car breaking down. When money is not set aside people tend to go into debt to cover these expenses which can make an emergency even more stressful than it has to be. While these events are not planned and seem to come up at the worst times, you can be prepared by having an emergency fund set aside to make these situations a little easier on everyone.
As you start to save up for your emergency funds there are a few things to keep in mind. Keep your emergency fund in a separate checking account, so as to not tempt yourself and spend it. And when you use your emergency fund, replenish it back up ASAP! Examine your monthly budget and review your bills. Can you switch to a cheaper phone plan? Use less water? Switch to energy efficient light bulbs?
Here are a few more easy ways to save money:
- Eat out less
- Pay with cash
- Don’t buy coffee at a coffee shop and brew your own
- Pack your lunch
- Pay off credit cards to avoid interest fees
- Carpool
- Avoid late fees by setting up auto pay
- Use coupons
- Layer up and turn your heater down