saving money

Emergency Fund


We’re feeling the pinch already without adding any extras like saving for our kids’ college. Setting up an emergency fund falls well down our priority list.


Life is unpredictable and unexpected expenses happen; a safety net can help you pay for them without going into debt.

Experts can give us good advice when it comes to handling our money. On top of the list is (a) everyone needs to have a budget and (b) we all need an emergency fund.

Budget Your Money

You might be surprised to learn that many people have never learned to budget. They live from one paycheck to the next without giving any thought to where their money has gone. They have become so accustomed to using credit cards that they never run out of spending power until their credit cards have reached their maximum limit. Yikes!

Learning to budget before you accumulate debt can save you oodles of money on interest charges. Start thinking of interest payments as money you can keep or throw into the trash bin. Obviously, you’ll want to keep it. So, what better motivation is there for learning to budget!

Set Up an Emergency Fund

Most of us understand the importance of setting money aside in case the unexpected arrives. However, that’s easier said than done. Cost of everyday necessities increases weekly. Basics such as groceries, gas, utilities and housing are climbing faster than our income. We’re feeling the pinch already without any extras like saving for our kids’ college, house renovations, new appliances and vacations. Setting up an emergency fund falls well down our priority list.

But, what IF the emergency happens and you’re not prepared?

A family member is in an accident or becomes severely ill. Apart from medical expenses, you may need to take time off work to care for the patient. If the breadwinner is the one affected, where will you get the money to pay bills and put food on the table?

What happens if you or your partner is laid off work? No matter how secure you feel in your job, unexpected events can change everything. The company could be sold or merge with another business. The CEO is replaced by someone who wants to make an impression and begins cost cutting in your department.

If your air conditioning breaks down in the middle of a sweltering summer or your heating system fails in the winter, you would have to find a chunk of money to repair them. Your car suddenly stops running and your mechanic tells you that you need a new transmission. Once again, where are those thousands of dollars going to come from?

You might be lucky and not have any emergencies fall upon you. But, life is unpredictable. For peace of mind, figure out how you can put money aside to cover the unexpected.

Here are some tips on how you save money for that much needed emergency fund:

Food & Drink

* Buy only items on your grocery shopping list.
* Clip coupons or print them from websites.
* Buy store brands.
* Look for store specials and buy several frequently used items while the sale lasts.
* Learn to cook. Start with easy recipes and you may learn to enjoy it.
* Limit restaurant and take-out food to special occasions.
* Forgo bottled water. Instead, buy a filtering system and refill your bottle.
* Make your own coffee. Forget the Lattee and Mochachino. Your waistline will love you.

Telephone, TV & Internet
* Combine and bundle services with one company.
* Eliminate your land line if you don’t use it.
* Compare cell phone plans and buy only what you need.
* Evaluate your data downloading. There may be cheaper alternatives.

* Car Pool to work and social activities.
* Take public transportation and save on gas, parking and insurance.
* Save up your errands and attend to them when you’re in the area.
* Walk when you can and reap the benefits of exercise.

These are only a hand-full of suggestions. If you analyze your spending habits, you can probably come up with a few more.

To figure out your initial goal, multiply your total monthly expenses by 3. If you can’t scrape up enough to cover that, remember that having some money saved is better than none.

Photo: 401(k)2013