Warning, Warning, Warning!
By Ja'Net Adams
Americans are facing a loud warning when it comes to their money. Recently data came out that said only 44% of Americans could cover a $1000 emergency right now. That means six out of every ten people could not. The 60% of Americans without $1000 liquid would have to use a credit card or borrow the money and go deeper into debt. This is the endless debt cycle that many Americans experience for most of their lives. Having an emergency fund can turn an emergency into an inconvenience. I understand that saving the money for a fully funded emergency can be hard so I want to share a few options you can try.
Cut It Back:
The easiest way to find extra money is to look at the money you spend in your everyday life. Many people don't even realize how much money they actually spend. If you are someone that needs extra money for an emergency fund then take the next couple of weeks and track every penny that your household spends. You have to see how much money is being spent on a daily basis. Once you see how much money is being spent in different categories than you can start to cut back in those categories. The money you save by cutting back should go into a savings account.
Sell It All:
If you go through your entire spending plan cutting back on expenses and you still don't have $1000 saved or $1500 which is the number I like then you need to take the next step. That next is to sell "stuff" you no longer want. That "stuff" could be clothes, shoes, sports equipment, music instruments, artwork, jewelry, electronics, pretty much anything that someone will buy from you. If you have anything of value that is just sitting around collecting dust then go sell it and put that money in your savings account. The more your "stuff" sits around your home the more it loses its value.
Increase Your Work Hours: No one likes to hear this tip especially if they don't like their job, but sometimes it is your only option. You could cut back all of your expenses, sell everything you can and still not have a fully funded emergency fund. When that is the case you have to earn more money by working extra hours. You could request overtime at your job and if that is not an option then you may need to look for a second job. Understand that this is not permanent and you are only taking on the extra hours of work in order to get yourself in a better financial position. Once you are in position you can go back to working your regular hours.
Not having $1000-$1500 saved in an emergency fund could put you in a bad place financially if an emergency happens. An emergency could put you so far behind financially that it could take you a couple years just to get back. Don't let it get to the point. Prepare today. --
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