It is not a matter of “if”, but instead “when” those unexpected expenses will come up. The car breaks down and you also need money to tow it to get fixed. The air conditioner in the house went out, a tree needs to be cut down, or a Hurricane is headed your way and you need to buy things to prepare. This events will be stressful, but can you image the feeling of knowing you have an emergency fund? That lightens the load you have to carry a bit.
An emergency fund needs to be established to help with these costs. It is time to make this a priority. The ideal amount needed is 3 to 6 months of what your typical expenses are, but this does not happen overnight. Do not let this amount overwhelm you. Take baby steps…….start with a goal of $1,000.
Where do you start? Things are already tight and not much room for anything else. Having a written budget is so important. It tells the story of where your money is coming from and going to. You’ve worked hard for your money, so budget it for the things that are important to you.
Let’s break these down into detail.
Remember it is the little things that add up. It is important to write “savings” down as a line item in your budget, just as you would the mortgage bill.
Evaluate your phone bills. Are you paying for features that you could do without? Do you have both a home and a cell phone? If so, are you paying for features that you could do without? If you have call waiting, are you paying more? Do you need both phones? Shop around to see what services are available and match your needs and budget.
Grocery bills. This is the most flexible line item in the budget. You can choose to eat Filet Mignon or a Peanut Butter and Jelly sandwich. Yes, I would rather the Filet too, but the point is you can still have the Filet from time to time, but for a special occasion. Ground meat used to be inexpensive, but recently I’ve noticed where you can buy chicken or pork chops for less. Use Pinterest to search what meals can be made with the ingredients on hand. Don’t let things in the refrigerator, freezer, or pantry go to waste. Pay attention to expiration dates to ensure that they are used before they go bad. That is like throwing money away. By meal planning around the sales and by only going to the grocery store a few times, it will eliminate picking up those 2 or 3 extra things each time.
Use coupons, apps, or rebates. Use these in addition to the items being on sale. Read more about how to do this here.
Eating out. This was the biggest category that I had to work on in my budget. When I calculated how much I was spending on restaurants, it was hard to digest. The key to eating at home is planning. Meal planning will help as you will know what to cook and the best part is that you will have everything there. No more rushing out to the store or stopping on the way home from work. Cook a bigger portion and then you will also have leftovers for lunch the next day and not be tempted to eat out. You can still eat out from time to time but make it a special occasion instead of the regular routine. Having a few quick meals available is also a must. Life changes quickly, so we must have a backup plan for a quick dinner if needed.
Entertainment. Instead of eating out, have a pot luck dinner at your house. A favorite of mine is having everyone bring appetizers, snacks, and desserts. You can get a game of cards going, a board game, movie, or just enjoy visiting.
Cable. Evaluate if you watch TV enough to pay for this service. Are there alternatives to what you currently have?
Coffees. These $5 coffees add up quickly. By cutting back 2 times a week for a 4 week month, you can save $40.
Garage Sales. A great way to reduce clutter and make money in the process.
Pet sitting. Let your neighbors, family, and friends know that you are available to feed their animals, etc. It is important to know what each person’s expectation of taking care of their pet means.
Babysitting. Many churches need babysitters during church and their activities during the week or weekend. Also let those parents with small kids know you are interested. Some communities have babysitting classes which is also a good thing to take as well.
Yard work. There may be opportunities to weed flower gardens, put mulch, plant flowers, rake leaves, or cut grass.
Clean houses. Check to see if any family, friends, or neighbors are in need of routine house cleaning or perhaps just certain cleaning projects.
Work extra hours at your job if given the opportunity. If you are hourly and get overtime, this can help quite a bit.
Wash cars. See if there are families that would like for you to go to their house and wash their car. Now a days there are so many inexpensive drive through car washes that do a great job, but for those who do not get out much, they may be interested in this.
Shovel snow. (This is hard for one for me to image as I’m from Louisiana!) Older people or those with young kids may really appreciate an option to have someone else do this.
Photography. If you are skilled in this area, there are many opportunities to have picture sessions. Baby, weddings, seniors graduating, Christmas, and just because occasions are perfect opportunities to take pictures. Even if they may not be interested in paying you to take pictures, if you were planning to give them a gift, consider giving them a “gift certificate” for a free photo session as your gift. Your cost will be minimum and the gift will be priceless.
Both cutting expenses and increasing income, takes a commitment. Unexpected expenses can be very stressful, especially if there is no emergency savings fund. By establishing this fund, you will feel rewarded and less stressful. Start by trying to reach a $1,000 and the ultimate goal is 3 to 6 months of your routine expenses. This gives a cushion to fall back on when unexpected expenses happen. Remember they will happen, it is just a matter of “when, what, and how much”, so be prepared. Think of building the emergency saving fund as a game or challenge. To stay motivated, consider visuals like a vision board or a thermometer. The vision board can be positive quotes or pictures living a less stressful life. The thermometer is a visual where you can color in how much you’ve saved.
Think outside the box and start building the emergency savings fund. I know you can do it!