Frugal Wiz - Show me the Money

It really amazes me when I hear people say it is just $1 or $5.  If only I had that money every time they say that I would be rich.

People need to realize how that money adds up quickly.  That money could be added to a savings account building a emergency fund.  We all need a emergency fund.

Adding $10.00 a week to a emergency fund is an important step to financial freedom.  If you don't touch it at the end of the year you will have $540.00 which is a great start.  This could help out in a pinch if you need car repairs or home repairs done. 

Nothing ever goes as planned. Hence the reason everyone needs a emergency fund.

The majority of people could avoid bankruptcy if they had set aside a little money for a rainy day. A good number of people out there are living paycheck to paycheck. And any expensive car repair could put them into bankruptcy. Not to mention unexpected medical emergencies, appliances that stop working, getting laid off from a job, a long illness or an accident. You use an emergency fund for any cost you cannot anticipate.

Avoid letting unanticipated costs or happenings from putting you in financial ruin. You can build an emergency fund by following these simple tips.

Your goal for your emergency fund should be 6 months of your present take home money.  So whatever you earn in a 6 month period (this is take home pay not before taxes) should be your goal to save.  Having money in the bank to cover your needs (food, shelter and clothing) will be a relief when it is built.

Then take the above number and set goals with date.  When will you save $1000, $2000 and so forth.

Always put these funds in a savings account or money market account that can be accessed but not to easily.  You want to make sure your never tempted and never keep these funds mixed with your bill paying funds.

Make sure to check out online banks and credit unions for locations to stash your emergency savings.  They usually pay more than the big banks like Bank of America and Wells Fargo.  

Setting up a direct deposit from your paycheck into your emergency fund account will help you build your fund and set the tone of paying yourself first.

You do need to make a monthly budget to make sure you keep enough for true expenses.  Dining out and a morning latte should be the last thing you spend money on.  Make sure your savings always takes priority over these.

Rome wasn't built in a day, and neither will you emergency fund.  Any action you can take to begin an emergency fund will do you good. Don't be troubled to start with a small amount.  Then try to increase it whenever possible.

The best way to really kick your emergency fund off is by saving and putting away your tax return.  Millions of people get returns only to blow them on items that aren't necessary.  Even if you don’t take it all you should be putting some of it away or using it to pay off your debt.  Once you have paid that debt off though take the monthly payment from it and use it to build your emergency fund.

Start off the New Year on the path to financial freedom and get saving today.