3 Reasons You Don'T Have An Emergency Fund (And What To Do About It)
Are you of the many Americans who has no idea what they'd do if faced with an emergency bill or other financial obligation? If you're sick of making excuses and ready to build your emergency fund, consider the 3 reasons listed below why you don't have an emergency fund and find out what you can do about it.
You Can't Seem to Kick That Daily Coffee Habit
If you stop every day on your way to work for your morning pick me up, you may not realize just how much you're spending.
Let's break it down:
$2.25 x 5 days per week = $11.25
$11.25 x 4 weeks = $45
$45 x 12 months = $540
While $540 may only seem like a drop in the bucket, it's still enough to help you when you're in a financial pickle. That $540 could pay for a medical bill or a car repair bill, both of which can pop up unexpectedly and leave you scrambling.
You Think Credit Cards are Bad
With a little bit of self-restraint, a credit card can be used to build up your emergency fund, and here's how:
If you apply for a card that offers 1.5% cash back on all purchases and then use that card to pay for your regular monthly necessities, such as groceries and gas, you could use the cash back you receive to pad your savings. Of course, you'd have to be sure to pay the card off every month, but if you'll be spending that money anyways, why not use the card?
For example, say your groceries and gas purchases each month are $500 total. $500 x 1.5% = $7.50. In one year, you'll have earned $90 just for spending your own money. Sure, it's not enough to fund your future, but it's just one more little way that you can contribute to the bigger goal.
You See Your Monthly Savings Goal As an Option, Not an Obligation
If you've set up a monthly savings goal, great! Now, it's time to set a plan in motion that will result in your goal being reached. One way to sabotage your goal is by seeing it as an option, not an obligation.
Say you make $500 per week and have a goal of saving $50 per week, so $200 per month. Instead of allowing that $50 to sit in your account all week, why not have it automatically transferred to your savings account? This is one way to make your savings seen as more of an obligation than an option – it's almost as if you have a $50 bill each week, and your savings account just happens to be the payee of that bill. Remember, you're saving for your future self.
An emergency savings fund can be the difference between scraping by and financially thriving. To learn more about building up your emergency fund and securing your future, consult with a financial adviser today.
For financial advisers, contact a company such as Family Focus Financial Group.