Tell me if this happens to you….all of a sudden in a week’s time, like 4 things break and/or need immediate repair. Am I the only one?
This week, we had a outdoor pipe split, the ‘check’ valve on our plumbing go bad (and leak!) and the washer wouldn’t spin. They all required immediate attention!
Let me emphasize the importance of an emergency fund for your family!
Without an emergency fund, you will find yourself going in to debt when these things come up. Cars break down, appliances break, kids need stitches, the roof leaks, you know how it goes.
How to Start an Emergency Fund?
Let’s being with how much money you will need for your emergency fund. One month’s expenditures is a good start. You’ll want to work your way up to 3 month’s bills and then 6 month’s bills.
I can hear you saying “That will take forever to save for!” and yes, it will take a while but that’s ok, just get started.
If you are currently in the midst of paying off debt, you can save for an emergency fund simultaneously. If you don’t, you’ll find yourself adding to the debt over and over again when life happens.
It took us about 3 years to build our emergency fund! It seemed that we would no sooner than get a little money set aside for the emergency fund before the next emergency happened! Frustrating, to be sure, but you know what? At least we had the money set aside to pay the bill and didn’t have to add more to our credit cards.
Funding the Fund
The sad truth about paying off debt is that it must be done with “after taxed dollars” and the same is true for creating an emergency fund. ”Finding money” in your home and budget can be done and may require radical action, as it did in our case, to accomplish our financial goals.
Here are 10 ideas to free up some cash to pay down debt and to begin your emergency fund…
Give up a non-essential ‘treat’ like your daily latte/soda or weekly pizza run. This could easily free up $20 a week/ $80 a month!
Hold a garage sale, purging all the stuff that’s cluttering your house. You’d be amazed how much people will pay for your junk.
Clear your bookshelves and sell them on Ebay – I’m working on this now.
At the grocery, cut your food bill by $10 a week (easy to do!) and put your newly found $40 per month towards your debt and fund.
Don’t eat out! Learn to cook at home and eat in.
Don’t get caught hungry! I’ll cave every time if I’m out running errands and I find myself starving. Packing a water bottle and a sandwich saves the day and the dollar.
Take your teenager’s outgrown clothes to consignment.
Stay out of the stores and malls as much as possible. A dollar here and a dollar there can add up to hundreds of miscellaneous spending!
Turn out lights and turn down the thermostat to save on your electric bill ~ a constant battle for me.
Leave the car in the garage! With gasoline at $3.50 a gallon, I am very careful and strategic about errands. Stretching fill-ups from weekly to bi-monthly can leave cash in your pocket, bigtime.
Little by little, bit by bit, you can create an emergency fund for your family. It takes work but the financial freedom is worth it.