Sunday, December 4, 2011

Frugal Prepping - Starting An Emergency Fund - The Spare Change Method

In order to be prepared, you should expect the unexpected. Things happen that will disrupt your life and they usually occur at the worst possible time. This is what creates the need for a basic emergency fund. You will need to prepare for these unseen emergencies to enable you to avoid a major disruption to your lifestyle. Having extra money set aside is one of the best solutions
for this problem.

There are many types of financial situations where you will need extra funds to get you through a crisis. This could be anything from the loss of your job, increased medical expenses or emergency repairs to your home or vehicle. You don’t want to find yourself in a position where you have to rely on credit cards, personal loans or other similar types of credit which could actually increase your financial problems.

Now starting an emergency fund won’t be easy for the average person. It will be especially difficult if you are living paycheck to paycheck. If you don’t have an emergency fund, the hardest part is getting started. If you find it hard to put aside extra money, you will need to start slowly and work to build a decent emergency fund. This will take time but if you set manageable goals for yourself, you will be able to eventually build your emergency fund up to a point where you will have several months worth of expenses covered by money you've set aside. If you take things one step at a time, you will have a better chance of reaching your goals.

Unfortunately, extra money is hard to come by when you are living paycheck to paycheck. If this the case in your situation, one of the easiest ways to build an emergency fund is the spare change method. There's an old saying " Take care of your pennies and the dollars will take care of themselves." Saving spare change is one of the simplest ways to save money for an emergency fund. It doesn't require a lot of sacrifice on your part. If given the right amount of attention, you will soon find yourself accumulating the additional money to build a substantial emergency fund.

Just keep a small container of some sort at home and in your vehicle and dump the change from your pockets each day. Don't bother to count it each time or you may find yourself tempted to spend it before it can grow. Once your storage container gets full of spare change, just transfer it to your emergency fund.

You will be surprised just how much extra money can be accumulated in this manner.

Got spare change?

Be aware. Be informed. Be prepared.



mona said...

I save chance every day. At the end of the year I have saved over a $100. I just put it in the back of the closet. Never know when you may need it.

riverwalker said...

To: mona

That's great! I still save my change and even though it may only be about 15 or 20 cents each does add up. Unfortunately, while struggling to pay everyone else...many people forget to pay themselves also.

Thanks mona.


Brian said...

Great advice! I have been doing something similiar for a few years and now have quite a stash in my B.O.B. Financial preparations are just as important as all other emergency prep, unfortunately lots of people overlook this.

riverwalker said...

To: Brian

Thanks Brian.

There's an old saying "If you take care of your pennies, the dollars will take care of themselves."

All of your preps are important and forgetting to include finances in the equation can devastating if you are hit with unemployment, unexpected repairs, etc.

Thanks again.


Thomas Watson said...

It am also building my emergency fund to prepare for any form of financial emergency. There are events in which our only protection would be cash.