Like John Lennon said, “Life is what happens when you’re busy making other plans.” Unfortunately, this logic also works when it comes to unfortunate events which require money on the spot. For these situations, you need to have an emergency fund of at least $1,000. Yet, putting $1K aside just to be safe is no the most tempting thought. However, with a bit of planning, it can be done in only three or four months. The idea is to save $5-10/day, by minimizing unnecessary expenses and put those aside.
Of course, if you want to be more serious about your savings, there is always the option of a dedicated savings account, and we even have a list of the best online options for 2018 right here: https://aaacreditguide.com/best-savings-accounts/. For now, let’s focus on pennies to get your saving appetite going.
Forget Guilty Pleasures
Saving $10/day is not that difficult if we look closer at our habits and try to make a few simple changes. The Japanese have the concept of KaiZen which translates to “small improvement.” It is all it takes to generate a significant difference in the long run.
Simple changes that could have an impact include:
Just walk instead of taking the cab;
Brew your morning coffee and pair it with a supermarket delight instead of grabbing overpriced on the go;
Use those coupons, hunt for offers and don’t forget to buy in bulk, when available;
Pack a healthy and cheap lunch;
Let Go Of Impulse Shopping
Some people view shopping as a way to relieve stress or making a gift to themselves for all the hard work they put it. Although there is nothing wrong to treat yourself from time to time, if you buy a new pair of shoes or a fishing rod every time you have a bad day at the office, you should reconsider both your job and your approach to managing stress.
Make a deal with yourself and almost buy the item. Instead, put that money into an envelope labeled “I am so proud of me!” If you already bought things that you didn’t really need, try returning them, even 80% of the original value it’s still a good deal.
Have a Garage Sale
Keeping in line with the previous idea, if it’s too late to return some of the items you don’t use, it’s never too late to resale them. Have a yard sale or put them on eBay/Craigslist. If you haven’t used or worn an item for more than two years, you probably won’t miss it too much anyway. In fact, you could get your emergency fund money only from this action alone.
Use psychological pricing, like .99 and create product bundles from items that work well together to sell more. Never be afraid of bargaining.
Go through your subscriptions and ask yourself if you really need that fancy gym membership or if you really have the time to watch all those TV channels, Netflix and HBO. Usually, we get into automated payments and forget to unsubscribe, which adds up to hundreds of dollars per month. Just look at a credit card statement and highlight the memberships and automated subscriptions.
Creating an emergency fund should be a priority even for those who already have the responsibility of other payments like student loans and home mortgages. It is also a matter of self-discipline to start thinking more responsibly about money.
The great news is that once the emergency fund is large enough, you can use the same tactics to save for something a lot more fun, like a holiday or your next tech gadget.