In Part I of this series, we talked about some of the most common economic calamities that could strike at virtually anytime, leaving you and your family heavily in debt and economically devastated, perhaps for years.
Some of those potential economic emergencies include loss of job/employment, an unexpected car repair, major health crisis, sudden home repair, emergency trips to console family and friends, and an unanticipated large tax bill.
According to recent studies, the vast majority of Americans don’t even have $500 to $1,000 in savings in order to cover these unforeseen emergencies which, frankly, are ordinary occurrences in life. Living paycheck to paycheck is just a reality for most households, and that includes many with two wage earners. Saving money is just not something most Americans think they can do. (RELATED: America’s Total Credit Card Debt Is More Than $1 Trillion… Shouldn’t We Be Worried?)
But they’re wrong. Saving money without cutting deeply into your weekly or monthly budget is actually much easier than many people think. And though you’re not going to become uber-wealthy overnight, if you stick to a regular regimen of saving, you’ll be surprised at how quickly your bank account will grow.
Here are some of the ways you can save money for those common emergencies we discussed earlier (H/T More Than Just Surviving)
— Be disciplined: This needs to be said right off the bat – whatever you put away in savings, don’t touch it. “Taking money out of this account for anything short of a real emergency, anything [short] of what you originally intended this money to be used for – that would completely defeat the purpose” of saving for a rainy day, More Than Just Surviving noted. So there’s that.
— Stick to the plan: Look at your monthly expenses, and decide what you can comfortably put away each payday, then do it each and every payday. Make the savings deposit the first one you make after getting paid. This is called “paying yourself first,” and it’s the golden rule of building a savings stash. Don’t be worried about the amount of money you can comfortably put away; even if it’s just $100 a month, in a year’s time you’ll have $1,200 in the bank – more than the average person and enough to take care of most emergency expenditures (or at least make a good down payment on it).
— Use a different bank: Even in the modern era of electronic banking, some people suggest using a different bank than your main bank in which to put your emergency savings account. If the money is in a bank that is not your primary, then you tend to pay less attention to it. Out of sight, out of mind, so to speak.
— Use automation: Life is hectic so it is easy to fall out of the habit of taking a portion of your paycheck and moving it to a savings account. But, lucky for you, many banks will do this for you if you choose an automatic deduction option. Not only will this become memory proof, but it ensures regular deposits to your emergency funds account, and that’s vital to building up a decent reserve.
— Different accounts: If you have difficulty paying your house payment, rent, utilities, car payment, etc., you can set up different bank accounts for these payments. If you figure out what your payments will be for the year, you’ll be able to save for them. Hint: Over-save, because it’s better to over-estimate than come up short. You can do the same thing for a vacation fund as well.
— Big-ticket items: If you know at some point in the near-to-mid-term you’re going to have to make a major purchase of a big-ticket item – washer/dryer, car, refrigerator, a new roof, siding, new flooring, etc. – you can create a savings account specifically for this purpose, and divert a portion of your paycheck to it each payday as well. (RELATED: Lawmakers Preparing For Societal Collapse With Plans To Set Up “Survivalist Communities”)
What are some advantages to saving in this manner?
— If you’re not much of a budgeter, using these savings techniques will allow you to save for emergencies without putting much effort into it.
— You will definitely be able to hit your weekly, monthly or yearly savings goals if you stick with depositing the same amount as you initially decided. If you get a raise or create an additional revenue stream for your household – but your living expenses have not increased – consider using the additional cash for savings, to build up a reserve even faster.
— Never feel guilty about what you spend. After you’ve made your initial savings deposit the rest of your paycheck is yours to do with as you please.
— Budgeting can also help you discover where you’re spending the most money – to include those “extras” that you don’t really need but which tend to cause you to run short at the end of the pay period (eating out, buying too many clothes, etc.).
Americans are notorious for spending whatever they bring in, which leaves us horrendously unprepared for life’s inevitable emergencies. Don’t be a statistic; learn how to save for a rainy day so you’re ready for those times. Because when it rains, it pours.
J.D. Heyes is a senior writer for NaturalNews.com and NewsTarget.com, as well as editor of The National Sentinel.