How will you pay for an emergency car repair? How about when the family cat needs high-dollar vet care or worse, you or your spouse lose your job? Do you have money saved for an emergency?
A new study found that nearly three-quarters of Americans have less than $1,000 saved in an emergency fund—the money you’re supposed to have tucked away for those unforeseen expenses.
People with lower annual earnings save less, presumably because once the bills are paid, there’s little left over for an emergency fund.
If you’re one of the 73 percent without an emergency fund, it’s time to get started. Personal finance gurus say you should save at least three months of your normal salary but instead of trying to meet that lofty goal right away, let’s aim for $2,000. Doesn’t seem doable? It is…you’ll see.
You can save $2,000 in one year WITHOUT major lifestyle changes.
How much could you save if you purchased one less of these each week?
1. Skip Starbucks- Let’s not get crazy! No need to say goodbye to such a fulfilling part of your life. Buy one less drink each week and you’ll save $156 in one year.
2. Stop eating out so much- Check out this amazing calculator. How would you like to move $342 closer to your goal by packing your lunch two days per week?
3. Get rid of your land line- Sure, people will say that you need your land line in case of an emergency loss of cell service but there’s probably a neighbor who has one you can use. (Go introduce yourself to your neighbor…right now. 🙂 ) There’s also Internet-based phone services. It’s hard to say how much you’ll save since landlines are often bundled into cell and Internet service plans but at $20 per month, that’s another $240 towards the goal.
4. Drink Water- Somebody did the math. The average American eats out 3.1 times per week and orders a soda. Drink tap water and you’ll be $324 richer at the end of the year.
5. Programmable Thermostat- How about taking 20 percent off of your heating and air conditioning costs? You can check out the average energy bill in your area here but let’s say that your average bill is $100 per month. That’s $240 in savings annually. You have to purchase the thermostat so lets call it $200 assuming prices range between $20-$80.
You don’t have to be an extreme couponer. A couple of coupons could represent a sizable cost savings.
6. Coupons!- No, we’re not saying you need to spend hours every week in an attempt to cut 50 percent from your grocery bill. Who has time for that? Buy the Sunday paper, spend 30 minutes going through the store ads and matching them up with coupons you clipped. If you saved $12 per trip to the grocery store, assuming you shopped twice per month, that’s another $288 per year.
(If you DO have time for some extreme couponing, there’s no doubt you could save a lot more but that’s for a different article.)
7. Get rid of a Cable Box- If you have children, you probably have extra TVs in the house equipped with a cable box. Each box probably costs around $15 per month. Get rid of just one of those and that’s $180 per year.
Also Read: How to Teach Your Kids About Money the God Way
8. Set up an automatic transfer- Each month, make a $25 transfer from your checking account to your savings account. (On one of the days you get paid.) All you have to do is cut $6 from your weekly spending to finance the transfer. That’s another $300 per year.
That’s a savings of just over $2,000 per year!—and we did it without taking on extra jobs, drastic lifestyle changes, or selling all of our worldly possessions. If you have a lot of debt, drastic lifestyle changes might be required but $2,000 is a commendable step in the right direction.
Personalize your Plan
Some of our 8 ideas above won’t apply to you. If you don’t have a land line, replace it with another expense that you do have. The specific items aren’t as important as identifying small money drains that are taking a sizable bite out of your paychecks.
Of course, if you’re the kind that wants to get drastic, and gurus like Dave Ramsey would say that we all should, you could double that $2,000 easily. But let’s start with attainable goals, shall we?
PS…make sure you take the money you save and deposit it into your savings account. If you don’t remove it from your checking account, you’re less likely to save it.