Studies have shown that many Americans get caught in unfortunate situations with emergencies of any kind. All because they did not adequately prepare for them financially. Most people would answer "no" if you were to ask them if they had $1,000 in emergency savings somewhere. That includes even those with salaries between $75k and $100k. One of the main reasons for this all the misconceptions about how to save and how long it takes. You might be surprised at how much you could build up in your savings account in a short amount of time! If you don't touch that money, you can have it ready to go for whatever misfortunes might come your way.
Use Automatic Transfers in Your Bank Account
Your financial planning and monthly budgeting should include a cut to deposit into your savings fund. Whether it's $10, $20 or $30 each paycheck, that money can start accruing in your savings and soon add up to hundreds or even thousands of dollars. Of course, that's assuming that your personal emergencies don't happen too often. Most banks allow you to set your account up so that when a direct deposit clears, money is automatically moved from checking to savings. In some cases, doing so allows you to avoid a monthly maintenance fee.
Put Your Extra Influxes of Income into Savings
There's a good chance you could run into extra money from time to time. Some examples can be a tax return, your birthday gift or even perhaps a sweepstakes prize, lucky you! Instead of spending all that money, put that towards your safety net savings goal so that it's available when you really need it. It's alright to have a few luxuries now and again, don't get me wrong. However, if you're living paycheck to paycheck, it'd be better to place it in an emergency savings fund than to treat it as expandible income.
Sell Valuable Items, If You're Willing To Part With Them
While some items may be too valuable to part with, there surely are some things lying around your home that you could sell. Maybe you have an old coin collection that's up in your attic collecting dust, or perhaps old model cars you never use. Collectibles can sometimes sell for a significant amount of money if you know where to go with them. Selling things from time to time, either online or by having a yard sale is one way to add money into savings without too much hassle.
Only Borrow from No Interest Rate Sources
Going into debt is not proper financial planning for emergencies. There are ways you may be able to borrow without going into debt. If you do need a few hundred dollars that you don't have in savings, a payroll advance is one way to borrow without paying interest.
A payroll advance is something that a few employers offer, so ask if it's something they are willing to do. It allows you to acquire an amount that you would get paid in the next pay period. You typically just have that amount deducted from your next paycheck or two, and you pay no interest.
If you can't do that, your friends or extended family may be an excellent safety net source for borrowing. Make sure you keep your word, though. Your relationship with them could be significantly damaged if you don't pay back your debts. Always make sure to keep that in mind.
This is not legal or financial advice. Please consult a legal or financial advisor for your specific situation.
