Creating an emergency fund is not as hard as people think. Simple steps can be taken that will help save money and actually improve spending habits. By learning to put these small steps into play every day, an emergency fund can be established in just a few weeks. At the end of a year, a healthy nest egg will be available to cover modest, unexpected emergencies.
*Save the change – Every time a purchase is made with cash, save the change. Keep a small plastic bag or sealed container and put the change in it whenever cash is used. Transfer the change to a larger receptacle at the office or at home to make sure it doesn’t get lost or used.
*Brown bag it – Instead of eating out every day, carry a lunch. Take the money normally spent at restaurants and buy the food that is needed for a week’s worth of lunches. Deposit the money saved into the emergency fund. Even though it’s only a few dollars a week, adding other money saving ideas will help the fund grow on a daily basis.
*If I had a nickel – The phrase, “If I had a nickel for every time this happened” can be put to good use in this situation. Every time a light is left on when someone leaves the room, they put a nickel in a penalty jar. Over time, people will stop leaving lights on so the task or energy wasting activity can be changed each month. For example, every time a person chooses to drive when they could easily walk, they owe a dollar. If they leave the water running, when they brush their teeth or do dishes, they must pay a quarter.
*Saving for an emergency – Open a bank account and deposit the collected change each week. This prevents them it from being used for other purposes. When put into an interest bearing savings account, it will begin to earn on its own. The more money saved the more money earned and the bigger the emergency fund.
*Making change – One of the best ways to help an emergency fund grow is to change the way a person thinks about saving money. Make positive changes in how money is used and where waste occurs. Taking steps to eliminate financial waste and capitalizing on opportunities is the best way to make positive change.