Financial Fitness: Build Your Emergency Savings

If your car broke down today, how would you handle the expense of having it towed and repaired? Reports show millions of Americans have no emergency savings. While having 3-6 months of expenses in emergency savings is ideal, that’s a goal you may need to build up to. For now, set a short-term goal for yourself. Try to fill your savings account with one month’s expenses, or even one rent or mortgage payment. That way you can at least cover the basics if a big expense pops up. Here are a few ways you can find money to move to savings.

Waste not, want not. Skip meals out and plan your weekly menu before you go to the grocery store. Save even more by planning meals based off your grocery store’s sales ad. Only buy the items on your list, buy generic when you can, and only buy as much as you need when it comes to perishable items. These steps reduce waste, your grocery bill, and your overall food budget.

Reduce your payments. Consider consolidating your debts and reducing your interest rate to help lower your various debt payments. Once you’ve built up your emergency savings with the difference from your smaller payment, you can start putting more money toward paying down the debt faster.

Sleep on it. Before making any purchases outside the essentials (food, gas, utilities), stop yourself and reconsider the purchase. If you don’t still want or need it the next day, skip it. Curbing your impulse buys can help you cut your credit card bill and put more money in your savings account.

Try to use multiple tactics to save the most. You can also automate your transfers to savings on paydays so you won’t forget to pay yourself first.