In todays' ever changing economy, its tough to save that three month emergency fund the experts tell us is so vital to our financial well-being, but I have found that having even a fraction of that on hand can be a lifesaver. Of all the ideas, programs and tested and true's out there, which one actually works to get you the desired results of actual savings in your pocket? After spending weeks researching the internet, reading books that specialize in saving money, attempting to design my own various plans and opening a private savings account, I think I stumbled on a very simple system that seems to work well for me. This seems to work for anyone brave enough to give it a try and it works well for those on a low to middle income if they are willing to develop six consistent habits.
It's really not as scary as it sounds, nor is it difficult. In fact, you will be shocked at how quickly it becomes a habit because you will see results on a weekly basis. Interested? Well, if you are still reading this article, you want to know more so here it is. This simple plan has worked so well for me that I was able to purchase a used van for six hundred dollars when my car ceased to work at all and I literally had no other form of transportation when I really needed it. I also had several hundred dollars left over.
It also worked well to save over a thousand dollars in three months plus air fare to fly across Canada for my husband's mother's ninetieth birthday for two weeks last November.
Here it is in a nutshell. First habit involves making consistent payments, whether the sum total or half the total, on all your bills, especially your credit cards. The second habit requires taking one hundred dollars from every check that comes into the household for savings. This third habit is a tough one for most people because a lot of us live on credit, but if you stick to it, it will pay off. Do not use any plastic of any kind! That means no credit card spending period. I use them as my emergency funds. The fourth habit is to use your debit card to only withdraw cash from your bank account and always have cash on hand. This can create some problems for people who have a tendency to spend cash if they have it in their wallets but again, its a matter of discipline and a genuine desire to save money. The fifth habit is where you start to see how spending only cash begins to add up. Save all your change. I put mine in a special container I have for this purpose and its here, when you save the pennies, nickels, dimes, quarters, loonies and twoonies that you really see your savings build each month. Finally the sixth habit, another tough one for most people; absolutely no unnecessary spending. Unnecessary as in going for lunch or coffee every single time you go out, buying things not on your grocery list and shopping for things you know you can do without.
This system is designed to save one hundred dollars a month in change and it does. I began adding a hundred dollars from our paychecks to hasten my monthly savings and provide a much needed 'cushion' for the rest of the year. I do not spend this money, instead I save every single penny and put it aside, not to be used unless a sudden need comes calling, an emergency arises or an investment opportunity comes my way. It has been a great comfort to me in a changing, sometimes frightening economy where you can not always depend on the employment you have to see you through. I have tested this simple system for two years now and this is my third year of saving my change. Its gotten to be such a habit now that I actually have difficulty parting with my change! I'd rather use a ten dollar bill. I have seen for myself how pennies and the rest of my change have a way of adding up quickly into hundreds of dollars of my cushion for the year.
An three month emergency fund or even a few hundred dollars can make all the difference when paying a balance on your monthly rent or mortgage or that sudden simple car repair that arises unexpectedly. Since this money is not considered as part of your regular monthly income, it has the virtue of already being saved for just such emergencies as those and do not affect the income you have in your bank account. That money was spoken for before you ever made it. Just six small consistent habits for the new year will put twelve hundred or more, depending on how consistent you are, in your emergency fund and give you a simple peace of mind you never knew existed. |
