Life is unpredictable, but one thing is certain: It takes money to live.
Just as you’re coasting along, you may discover your car has a flat tire. Or your employer scales back, leaving you looking for a new job. Maybe you make your health a priority, but an unexpected root canal leaves you holding medical bills.
These are the kinds of common-yet-unplanned emergencies that take people off guard. And given that the majority of Americans don't have enough saved to cover even a $500 financial setback, according to a new survey by Bankrate.com, any number of unpredictable expenses can leave people financially stranded.
Most financial planners advise consumers to earmark between 10 and 30 percent of their income for savings, and we’ve suggested setting aside money for daily living and planning for life events with four savings accounts.
Make Small Changes
You’ll have to settle in for the long haul to build up enough savings to achieve financial security or independence, but even having $1,000 reserved in a mini emergency fund can help you pay for life’s unexpected financial costs – as well as prevent a lot of sleepless nights. Building a $1,000 safety net is what financial authority Dave Ramsey calls a “baby step” on your way toward a money makeover and others consider the foundation of a prudent savings plan.
Last year, CNN queried financial advisors to discover their recommendations for starting an emergency fund and shared some encouraging news.
Quoting certified financial planner Dave Abate, CNN reported, “There are opportunities in most people's budgets and lifestyles to find these type of savings." You’ll have $1,000 in savings in a year – with a few bucks to spare – if you shave $84 from your monthly budget.
But why wait a year?
Surely, setting aside a grand quickly can seem as feasible as winning the lottery when you’re living paycheck to paycheck, earning an irregular income or just getting started. It’s not, but you might have to get creative to stash away cash quickly.
Free Up Fast Cash
Here are five ways you can save or make $1,000 over the next 30 days. Pick a few, and you’ll be on your way:
- Consider a new way of managing everyday expenses by removing things like premium cable, home landlines and reduce expensive utilities such as electricity by opening your windows half day in the mornings for natural air, rather than running your air conditioner
- Shop better deals and use coupon apps to price shop for groceries and other household items
- Sell stuff you’re not using by holding a garage or yard sale or listing items on eBay
- Take your lunch to work using these “brown bag strategies” – maybe even give up eating out altogether for one month
- Adjust your tax withholding to increase your take-home pay; use the IRS Tax Withholding Calculator to figure out how many allowances you should claim
We’d love to hear from you. Have you tried any of these tips and what others would you add? Comment below to help fellow members of this ECCU community save their way to a healthier financial future.
This post is provided by ECCU for educational purposes only. It is not intended to be tax or accounting advice. ECCU disclaims any liability arising out of your use of or any financial position taken in reliance on information provided in this post. Consult a tax professional concerning your own specific tax circumstances.