BusinessHABIt’s all about momentum. Open a savings account and put $100 in it. That’s hardly enough to cover most emergencies, but it’s something to build on. Then take a look at some of these tips to grow your emergency fund and before you know it, you’ll be prepared for the next rainy day.
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1. Use Your Tax Return.
The average tax refund in 2019 was $2,703. That’s more than enough money to jump start an emergency fund. Then each year take a portion of your return and add it to your emergency fund.
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Grow Your Emergency Fund
2. Increase your income.
You can find a part-time job that fits your schedule. The thought of working three extra hours a day might be depressing, but it beats the thought of not having enough money to save your dog’s hearing. You can also generate income through selling items on eBay or Craigslist.
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3.Cut expenses.
There’s no shortage of options here, from carpooling to using coupons for shopping to eating out less to turning the thermostat up in the summer and down in the winter. You could stay home on your next vacation. With a little planning, a staycation can be just as fun and a lot less expensive. And the money saved would be a nice boost to your emergency fund.
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Grow Your Emergency Fund
4. Keep the change.
When you get some $1 bills after breaking a $20, drop a couple into a jar at home. When it’s full, deposit the money into your emergency fund. If you don’t carry cash, you can use a mobile savings app like Qapital, Acorns or Digit that makes automatic transfers.
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5. Move Checking funds into savings.
The money in a checking account is most-often for immediate use and there could be times when we have more there than we need to handle monthly bills. Monitor your checking account. If there is a surplus there, move it over to savings where it can sit quietly, waiting for an emergency.
Grow Your Emergency Fund
6. Use a grocery shopping list.
A grocery list is like a plan of attack. Without one, the forces of hunger and temptation are going to defeat you. Research shows people not only will purchase more food when they’re hungry, they’ll purchase more high-calorie junk food. So before venturing into the supermarket battlefield, have a healthy snack. Then write down the items you need and stick to that list. Feel free to make exceptions if there’s a great sale on dog food or other items. Just be sure you have a dog before making the purchase.
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Shop around for better rates on insurance and credit cards.
Insurance is a hotly competitive market, so it pays to get quotes from as many companies as you can. Be open to combining your home and auto policies. With credit cards, it’s all about the interest rates. The difference between a 12% APR and a 22% APR can translate into hundreds of dollars annually. Call your credit card company and ask to speak to a supervisor. Then request that they reduce your interest rate or you’ll transfer your balance to a different card. If you feel that’s too confrontational, a counselor in a debt management program will do it for you. They work with creditors to get the lowest rates, then they combine your various debts into one monthly payment.
That can save you a substantial amount of money and improve your credit score. But whatever tack to you take, it will pay to remember things like Irma and Harvey. When you have an emergency fund, you’ll sleep a lot better on those dark and stormy nights.
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