It can be challenging for everyone to set up savings goals, and stick to them. Sometimes, you want to save to buy a dress you saw in the boutique or you save up for that vacation to Europe or Hawaii. It’s easy to see, your savings are for recreational endeavors and not your necessities. Have you ever really considered what you would do if you needed money fast and you have bad credit? What will happen if you get laid off from your job and you couldn’t find another one for a while? Or what if you got sick and you had to pay expensive hospital bills? Do you have enough money saved up for that?
Most financial experts in the USA say that you don’t. In a survey conducted by Pew Charitable Trusts with 7,845 American people, it was found that one in every three American families has no savings. Among these families, ten percent are the families that are earning well over $100,000 a year. In such conditions, where the job market and your medical condition is in fluctuation, the probability of you getting into a financial emergency is high and the probability of running into a financial crisis is even higher. According to the survey, most American don’t even have enough savings to pay any extra unplanned bills if they received them. Forty-one percent admitted that they could not even afford to pay a $2000 bill if they received it.
Hey, your credit card seems like a good option, right? Financial experts say otherwise. According to the CEO of the non-profit Society for Financial Awareness, Jim Chilton, no one should ever take the credit card ‘high road’ in any financial crisis. It may seem like a good option or a way out but the double figure interest is more than you bargain to pay for later.
Most financial experts are advising Americans to make an emergency account and start saving. It may seem like an impossible goal at first but the financial experts give some advice on how to make a stable and reliable savings account that you can tap into during any emergency.
Start Your Emergency Fund
For your family to start saving, it’s very important to start fresh and clean. That means that your family has to clear out all and any outstanding debts that you might have. Any credit card debts, student loans, leases or loans that you have should be cleared. No stress or saving is worth you stressing over any unpaid debt. You should start saving when you can and not before that. Take extra care that while you are paying off the debts, you don’t create any new ones. Consider the loans you already have, how they came into existence and figure out a plan to pay them without creating more debt.
Start with a Small Emergency Fund Amount
You don’t have to start with making big payments into your saving account. Keep the first savings small. Don’t worry if you can’t deposit a $1,000 in your savings at once. Start analyzing your bills and expenses and see how much money you have left at the end of the month. Put any money you have sitting in your purse and wallet into your savings account. It can be a hundred dollar bill or loose change. No amount is too small when you need it. Make it a habit to keep putting little amounts of money into your savings and steadily increase that amount.
There Are Many Ways to Save Money for Emergencies
If you are creating a savings account, it is very important that it should have savings during an emergency. If you think you can just keep putting money into your current account and consider it a saving, remember that it will end up being spent on one thing or another. You need a specific amount to be there in case of an emergency. Financial experts advise that you can follow two ways to ensure the safety of your emergency savings. You can either set up a draft deposit in your bank account which will have a specific amount for deposits every month. This will build your savings from your bank without you making any special effort to save. Make sure you keep that draft deposit for emergencies and initiate specific protocols that will keep your draft deposit from getting into your own hands. The other strategy is to make a separate savings account altogether. You can deposit whatever savings you have in that account and keep in mind that you can only make withdrawals from this account in case of emergencies. The trick is to forget you ever had an emergency account. Pay the deposit like a bill every month. In the case of any emergency, you will have a decent amount that last you if you come across a crisis.
Drop Your Vices and Save for Emergency Money
In order to save, you need to start making some lifestyle changes and stop debating the pros and cons of instant approval payday loans. If you are a smoker, drinker, lavish dresser or an extravagant eater, just think for a minute if it’s worth being broke in your time of crisis. Chilton says that the average American spend over a $1,000 dollars every month on restaurants and fast food. You need to consider all your habits and expenses and make cuts where they can be made. You can start taking lunch from home instead of going out for lunch during work. You can cut back on going out every week and have a dinner and some quality time with your family at home. You can also cut back on the six packs and the cigarettes every week. That’s a double benefit to your health and finances.
Stash That Extra Cash
When you get a raise or tax return, don’t be too eager to spend it on something you don’t really need. Put it straight into your savings account. You will be glad that instead of treating your friends to an extravagant meal at an expensive restaurant, you made the decision to save for your crisis. If you receive any kind of extra amount of money from any source, put it into your savings instead of spending it.
There’s an ongoing discussion among financial experts regarding the nature of savings. Most financial advisors think that it is a bad idea to mention the bank account in your financial plans and budgets. Banks will immediately seize your savings alongside your current accounts if you cannot pay their loans. The best way is to open a savings account in another bank altogether. Mentioning the account in your financial plans gets a little bit tricky. Financial advisors say that you should keep from mentioning the account or your savings until the very last possibility.
Having a savings account can be your safety net when you need it the most. In the unpredictable financial situation of the world presently, you have to start thinking ahead instead of just today and secure yourself and your family.
