We all know we're supposed to save money and build an emergency savings account, but it can be hard. Especially when financial inevitables like unexpected car repairs, medical expenses, appliance repairs, or other unplanned purchases arise.
These ‘life happens' moments can derail even the most focused household budget and cause plenty of stress. Sure, you can use debt to pay debt. Many of us have done it, such as using a credit card to pay a mortgage. But that can make matters worse both financially and mentally. You still owe the money and now you're even more anxious about it.
You're Not Alone
A recent U.S. Financial Health Pulse report indicates that many Americans don't have $400 cash to cover an emergency expense, and 36% of us don't have enough to cover three months of living expenses. We've all heard the "pay yourself first" mantra over and over again. It's like a broken record. Of course, we want to pay ourselves first. But at times that seems impossible. Here's the reality; you have to start somewhere.
Start Small. REALLY, REALLY SMALL. Even if you can put just $5 a week into a savings account, it's a smart step towards building your emergency savings. Just $5 a week turns into $260 in just one year. That's a great start to a rainy day fund. You might also consider a 52-week plan where you save $1 the first week, $2 the second, and so on. In just a year, you'll have saved almost $1,400. The easiest way to do this is to set it and forget it with automatic savings. Just open an additional One Nevada savings account with direct deposit and have a very small portion of every paycheck go into that account.
Work a Side Gig. It's never fun to leave one job and head to another, but even a handful of extra hours a week can help pay down debt and build an emergency fund. Plus, you don't have to limit your search to part-time jobs. Consider a side gig type of job such as freelancing, driving for a rideshare such as Uber or Lyft, conducting surveys, or selling something via home parties.
Live Frugally for a Week or Two. We all like things that are shiny and new. Especially new gadgets. But those things can eat away at your budget, put you further into debt, and keep you from building your savings. Again starting small is the key. Try not spending any money outside of necessities for one weekend. Then try a week or two. Then three or four. Pretty soon, it'll be a way of life, and you'll be amazed at how much extra money you'll have to put toward building your financial resiliency with emergency savings.
Look for Ways to Cut Expenses. Instead of blindly paying your bills every month, write down every expenditure, look at the details, and question whether you really use or need all that you're paying for. Are you paying for any streaming or subscription services you're not using? Can you turn off services for a few months to save money?
Insurance is another great category to see if you can save a little dough. We all know insurance is one of those necessary expenditures, but paying too much for it doesn't have to be. Make a quick visit to onenevadainsurance.com, and they'll shop dozens of insurance carriers for you to see how much you could save monthly. Just remember, whatever you save, put some or even all of it towards that emergency savings to help you build your financial resiliency.
Ask Before You Spend: We've all been there. You have some extra money after you've paid your bills and you're tempted to spend it instead of saving it. Before you do either, ask yourself three questions: Is the thing I want to buy right now absolutely necessary? Can I cut back on something else to pay for it? Do I need it right now? Unless the answer to all of these questions is yes, try to save the money in an emergency fund.
Building an emergency savings account is one of the best ways to protect yourself from unexpected expenses and build your financial resiliency. It can be hard, but it's not impossible. It just takes a thorough evaluation of what you're spending to carve a few extra bucks to put away and a commitment to stick those dollars into savings. We'll be here if you need any help along the way.