Ten Ways to Build an Emergency Savings Fund

[Jul 9, 2010.]

 

Consumers with cash on hand are less likely to require fast payday loans to pay for a car repair, a utility bill, or the rent. If you have too many payday loans or too much credit card debt, you may think you don't have enough income to start a savings account. Try some of these suggestions from financial experts to find a way to save. The sooner you have some savings, the faster you can reduce your debt.

1. Put cash in an envelope or a coffee can every week. Commit to a specific amount, even if it's just $10 and don't allow yourself to spend it.
2. If your utility bill is smaller than expected, take the extra money you would have paid and put it in savings.
3. Open a savings account at your bank and have automatic transfers set up. It can be easier to do a tiny amount each week or every two weeks at first until you are used to having that money gone from your checking account.
4. Get a second job. While you may not want to do this forever, if you can temporarily take on some extra work--delivering pizzas, babysitting, working in a store on the weekend--you can quickly build a savings account with the extra income.
5. Sell items from around your house on eBay or at a garage sale and open a savings account with the money.
6. Put the spare change from your purse or your pockets in a jar every night. Take the change to the bank at the end of every month to put in your savings.
7. Spend less on eating out, especially at lunch. Each time you take your lunch to work, take the money you would have spent and put it into your change jar or transfer it into your savings account. Same with coffee or snack breaks--bring treats from home and save your cash.
8. Look at all your bills for things like car insurance and phone service and see if you can get a better deal. If you can, take the money you save each month and add it to your savings account.
9. When you use a membership card at the drugstore or grocery store, the savings you received are printed at the bottom of the receipt. Treat this like real savings and put the cash equivalent in your change jar or savings account.
10. Don't spend your tax refund--add it to your savings.

While payday loans can be helpful when you are strapped for cash, getting control of your finances, starting a savings account, and finding a way to reduce debt can reduce your reliance on payday loans.

 

About Author:

Michele Lerner is a freelance writer with twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance, and business.