How Do You To Afford An Emergency Fund? Tips To Help You Create A Cash Cushion

Some year ago I found myself having at least a three-month cash cushion set aside for emergencies, now it seem we have need of at least a year’s cash cushion to cover all those basics expense such as food shelter, cars problem, and so on.

It look like a good idea to put the money into an easy-access account, the only downside is that many people could not set aside that much money.

However, if you use some simple tactics you could both earn and save some bucks necessary in such moments.

Imagine you have a severe toothache. What should you do if into your wallet holds nothing? Without a cash cushion, you’ll have to put your hand on your credit card, or worse, take out a payday loan.

To solve at this problem you can start saving a minimum $500 in the bank. That’s enough to avoid bounce fees, steer clear of payday lenders and cover most minor emergencies so you don’t have to add to your credit card debt. I recommend to read Liz Pulliam Weston article.

Do Microsaving To Get Best Results

According to Wikipedia:

“Microsaving is the act of saving small amounts of money, at a time, and is achieved through the act of conscientious spending. The idea behind microsaving is that these small savings will add up to give you stronger purchasing power later on. Unlike savings, microsavings are more temporary. While savings build towards larger more futuristic and permanent purchases, microsavings would build towards smaller more immediate purchases. Microsavings rarely roll over into savings as they are rather volatile in nature.”

Maybe an example will help? Mary, has just a very low salary, which do not allows her to save more than $20 a month. She actually asked herself, “How I do save more?”

So, she get started with some single actions.

She added a little birthday money. And then she improved her finances with some little strategies such as:

• Recycling cans and bottles
• Holding garage sales
• Saving spare change and dollar bills
• Adjusting her savings rate when she got pay raises
• Selling scrapbook pages on eBay
• She rides a bike
• Banking the proceeds from coupons and rebates

The microsaving strategy Mary used is quite simple. A year after saved a bit of money Mary has created an emergency fund along with separate accounts for retirement, vacations and and so on. Mary continue save money using grocery coupons.

Microsaving Strategy According To Me. Just A Simple Strategy I Use.

Every day I spend one hour of my time in library to write manually my post. Instead of hitting the drink machine every day at 6p.m. I bring my water or soda from home, and while I there, I can catch up an magazines rather then pay for buy them. Also, I can borrow DVDs instead of using site like Redbox or Netflix?

When I have to launch, instead of pick up a rotisserie chicken at the market, put togheter a dinner from what I have on hand.

A few more tactics to make some cash for your fund and save more money:

• Answer online surveys and bank the payments.
• Change your habit, even forever. Leave out salty snacks fast food, or soda and try to figure out what you would have spent.
• Sell items on eBay. A friend mentioned that he had some of old toys that he wanted to try to sell.
• Many people are available to clean attics, babysit, pet-sit, design web pages, and so on, you can earn $40 to $50 a day.
• Just before payday, move whatever’s left in checking into the fund.

Of course, saving is hard, but suppose you have to pay $200 for a cell phone at 8% interest annually, and could afford only $10 payments, it would take 14 months to pay it off in full(use this calculator to check it) and of course there are other emergency you’ll have to encounter as well.

Image Credit: By Caston Corporate

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