Strength Training Your Go-To-Teammate: Emergency FundsFiscal Fitness Clubs of America
30 DAY CHALLENGE: Pump Up Your Emergency Fund
In Tackling Death and Disabling Disability, your first go-to-teammate is Emergency Funds. We’ve shown you how to get quotes to check on the efficiency of your insurance, but this blog will focus on how to build up that critical teammate, Emergency Funds.
Everybody knows we should have between 3 to 6 month’s reserves stashed somewhere for emergencies, but that amount can be daunting. Since most of us are tapped out and living paycheck to paycheck, how can we bulk up our emergency fund? Here are some strategies to get you started:
- Assign yourself a 3% household tax. If the tax rates went up, you’d grumble and then pay them. So why not make a household tax? Here’s how to do it: Every time income comes in, assign 3% of it to the “YOUR NAME HERE” Household tax. That’s so small, you won’t notice it. If you get a raise or the next year rolls around, increase it by 1%. Set the tax up, so it is automatically transferred to savings when you get paid. It’ll take 5 minutes on online banking. (Do it now!!! You can read the rest of the blog later.)
- Stash any refunds or reimbursements. Tax returns, refunds from deposits, cash rewards from credit cards, or the return from the blouse that didn’t match can add up. You were going without that money anyway, so make it a habit to stash it. You can write yourself a check each time, which brings home what you were spending, or you can transfer it weekly when you look at the charges that came in.
- Commit to earning extra cash one weekend every three months. Garage sales, freelance work, sell old cellphone or electronics, teach lessons in a skill you have, babysit, sell your gold, be a dog walker, participate in clinical trials, become an Uber driver, or find something you like to make and turn it into a small business. More profitable: rent out a room or host a guest through Airbnb. The point is to get creative, since there are ways to earn a little extra money to build your go-to-teammate. And, not doing it all the time won’t make it seem as a chore. There are all sorts of sites on line to advertise freelance/part-time work, so go for it.
- Match the coffee or lunch-out spend each week. Think of it as buying a friend coffee or lunch, but you’re actually buying your future-self lunch…and that person is definitely one of your friends! (If your friend was in crisis, wouldn’t you want to buy them lunch?) Write a check or deposit the cash to match the expenditure in the emergency bucket.
- Stash the cash and coins. You have a money jar for your coins, but why stop there? Single dollar bills don’t buy much, so stash those single bills as well. It won’t add up to great amounts, but every little bit helps. Once every couple of months, take it to the bank and deposit it. (Less tempting to spend that way.)
- Make it a double duty accumulation plan. Maybe you don’t need emergency funds, but you might want retirement, or college savings, or enough money to buy a car outright vs. financing it in a few years. Any goal more than 3 years out can motivate you to save, so figure out how much you need to save for that goal and increase it by 20%. Start saving that amount each month. Cut out a couple of pictures representing your goal, and put one on your refrigerator and one wrapped around your credit cards. If you have an emergency before achieving your next goal, you’ve got some money saved. Since you’re saving 20% more, when you reach your desired goal, you’ll still have an emergency fund and feel doubly good about reaching your goal!
Any one of these strategies will help you get started. If you followed all of them in one year, how quickly would you reach your goals? Well let’s start with the challenge this month!
Pick 2 strategies and see how much you save in the next 30 days! Share your adventure and success story on our blog (feel free to use a handle.) Let your coach know it’s you. We’ll send you a surprise!
What’s next? If you’re not a club member, but are interested in learning more about our services, follow this link to schedule your complimentary call today and find out if we are good fit!