Tag: saving $1000

Saving for that emergency fund.

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Emergency Fund Savings:

We have all heard the saying, we should have an emergency fund, right. “They”, meaning the experts say this fund should be between 3-6 months of expenses. Not an easy task for most and can feel overwhelming for many. According to Nerdwallet  45% of Americans could not come up with $1,000 for an emergency. Most Americans Save, but Many Can’t Cover a $1,000 Emergency – NerdWallet  That might be a car repair, so you can get to work, a repair at home that can not wait…. The list goes on. Most people are saving money each month, which is great, and it’s usually in a retirement account and or a savings account. Yet, on average as a group we are falling short with short term “emergency” fund account. We have discussed many times if you really look at your monthly spending and your “habits” there is a good chance you can find an extra $100.00 plus a month to put away in an emergency fund account. Sure, it may take almost a year to get there, at that rate, but the process would be started. If you look at it more as a game and a motivator as to how do I cut out another $20.00 here and there, and transfer that right into savings, thing will happen quicker! The emergency fund is NOT an account that you get to look at the end of the year and say hey I save $1200 and did not need any major or unexpected expense, and then use that money for something like a vacation! Bankrate did a survey on people saving for an emergency or saving for travel. Travel Vs. Savings: Many Americans Are Prioritizing Wanderlust Amid Economic Uncertainty | Bankrate I get it, I want to travel more too, but I also do not want to be under the stress of having to reach for a credit card to pay for a plumber to come to the house for a leak or for new tires! Credit card bills are stressful! Let’s stay out of the rabbit hole. When we have an emergency fund there is a sense of calm and pride to know you do not have to rely on family, a last-minute high interest loan shark loan or the credit card. It’s hard. I get for some that emergency fund of say three months, might be a large number.  The real goal is to start and have an emergency fund for emergencies. 

Hopefully no real disasters come your way like a job loss while you are working on your savings account. Like every big challenge, you need to start the process with small changes and once you gain confidence from seeing the impact, it will get easier. Like most habits we are trying to change, you may stumble here and there, just get back at it, it’s not a failure. Let’s work toward that first $1,000 in emergency fund savings and use that momentum to do more! This is in reach! How cool would it be to be on the other side of the statistics, of who has a $1,000 or more in an emergency fund! You go this!

Saving for an emergency fund:

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Let’s talk emergency funds! All the stats tell us less than half of Americans have three months’ worth of expenses in the bank. Other statistics tell us over 50% of people could NOT come up with $1000 if they needed to!

The experts tell us we must have three-six months’ worth of expenses in the bank for emergencies, like losing a job.  Let’s say you spend $3000 a month on average for expenses. Expenses are the essentials, like rent or mortgage, insurance, electric bill, groceries… You get it. Not the extras like takeout food, going to the movies…new shoes. 😊 For this example, we are using $3000 per month as your “essential” total, therefore you should have $9000 in a savings account. Yikes! That’s a lot of money!! I know I get it… But you must start with something… Maybe the first goal is half of that and as you build momentum it will get easier… It may take several months to get there, maybe a full year+… but we need to have a starting point… This is a SAVINGS account, NOT a retirement account. So, NO IRAs. Or ROTH IRA’s, 401K’s…  a savings account that you can access immediately!

This looks like a HUGE undertaking… I get it… We are NOT lazy; we work hard for our money! BUT are we paying attention to our money??? What if we start to drill down and pay attention a little bit more.

 Have you ever actually gone through your bank statements?  With online access to most of our accounts you can really drill down and see what you’re paying for.  Doing this for two or three months in a row and you start to see some things that pop up that maybe your saying “I didn’t know I was paying for that!”

Maybe it’s just $20.00 here, then $30.00 there… Or even $8.00 there… and before you know it you can probably pull together $100 maybe even $200 a month of expenses; you really do not need or WANT!

Let’s start there… And if you can’t get yourself to do this simple task, it might be worth looking into apps like Rocket Money or Truebill. Both apps help track your spending and can cancel subscriptions for you. Rocket Money also allows you to “automate” some savings as well. Both apps for the basic plans start at $3.00 per, but if it saves you $50+ a month and gives you a clear idea of where you are spending your money… Might be worth looking into! 😊 There are several apps out there so do some homework and put together the best plan for you! The goal is to DO SOMETHING… Once you start and get a handle on your HABITS… You can start to work on NEW Habits… That’s what all this money stuff really comes down to OUR HABITS… The goal here… FREE up some money, move it into your savings account AUTOMATICLY… and you will find a few months down the road you have money in the bank for those two new tires and you do not need to stress! 😊Good Luck! You got this!!!