Saving money is a concept everybody can agree is essential to financial stability. However, recent studies conducted by the Federal Reserve show that most Americans don’t have the savings to even cover 1 months worth of expenses.
An emergency fund is a savings fund that should cover all your monthly expenses for a period of 4-6 months. If you aren’t sure how to start, we’ve compiled a list of the top 10 ways to save money for a rainy day fund.
Add a Jar
If you are constantly carrying around change, create a savings jar. Believe it or not, spare change can add up quickly and can be a great way to save. If you have a few $1 bills from breaking a $20, add it to your jar.
Insurance is a large monthly expense for most people. If you haven’t been insurance shopping in a while, it may be a good idea to check on current rates. Instead of calling providers, try searching online for quotes from various providers. Even if you end up saving $50/month, that translates to $600 per year!
Kick Bad Habits
Whether you eat out excessively or are a smoker, these bad habits are costing you money. Most smokers spend roughly $500-$700 per year on smoking. Not only is it detrimental to your health, but also your bank account. Quit the bad habits and start saving money.
Sell Your Things
If you have something in your home that you haven’t used in over a year, sell it. Using tools like www.ebay.com or apps like OfferUp, you could be making cash on your unused items. Selling online is also a great way to gain some free space as well.
Services like cable and landlines are unessential in today’s day and age. If you’re still connected with your cable company, cut the cord. Instead of paying $95/month for cable bundle with internet and a phone line, switch to a cell phone and Netflix. Streaming services like Hulu and Amazon Prime are much less expensive than your typical cable package.
Utilities like water and electricity are essential for life. If you are in the habit of leaving lights on when they’re not in use, stop it. Cut your showers to less than 5 minutes and turn off or unplug all unnecessary electronics like your ancient VCR or DVD player.
Be Vigilant with Large Purchases
If you are planning on making a large but necessary purchase, be sure to conduct enough research to find the best deals possible. Search both online and instore to find the best deals possible.
If you are used to buying brand name products, try to look for generic options. This can include products such as prescription medication, groceries, and more. Generic brand items are actually the same as the name brand items just with different packaging.
No More ATMs
Although ATMs offer a large amount of convenience, they can also be expensive. ATMs can charge $3-$5 per withdraw. Instead of using an ATM, start visiting your bank to get the cash you need.
Instead of hiring a mechanic to fix your car or a plumber to fix a leaky pipe, try doing it yourself. You can find resourceful videos on Youtube that will walk you through the DIY process. Buy the supplies and tools yourself and cut out the repairman.
All in all, having an emergency fund is essential in current times. With so much volatility in the economy, you could be faced with a layoff or expensive medical emergency sooner than you expect. Taking the time to implement these money saving tips can save you big in the long run.