Even if you are the best budgeting mother around, one thing is certain, you never know when an emergency will make a nasty dent in your finances. We don’t know when they will happen but each new day brings the opportunity for unexpected trip to the hospital, car trouble, or worse.
When we find ourselves in these situations, many of us have no other option than to pay with plastic, credit cards of course. This might help in a pinch and being able to make monthly payments definitely takes away some of the pressure, but after a few years, the debt adds up and now you have a hefty monthly bill for all of those unexpected life situations.
Where to Start
- You can start today by putting aside as much money as you can afford to part with into a separate account from your checking account. I recommend creating a monthly automatic payment schedule that will take your cash and put it into an account that works for you. If you choose an institution that provides low-risk investment options, you may find that your savings have earning potential unlike a traditional savings account that offer only minimal interest rates.
- My husband and I decided to go ahead with this financial plan after our son was born, when we were feeling particularly vulnerable to financial emergency. We set up the account and chose the minimum monthly contribution of $50. We were nervous that we would miss those $50 from our budget, but it actually has not been too difficult to free funds for this payment. We hardly miss it.
- If you are not sure you can afford to pay yourself a small amount every month, assess your daily spending habits for places you can cut back some. It is sort of cliché, but look at your coffee budget. You don’t have to eliminate every stop at the coffee shop, but making your morning coffee once a week instead of ordering your usual triple shot latte can get you savings of up to $20 a month, that is almost halfway to your goal! What if you can handle two days of homemade coffee? Maybe that is oversimplified, but hopefully you see that it is conceivable to find this money hiding in your monthly budget. Get creative if you have to!
Now, my husband and I receive monthly updates on our investment and we’ve been happy to watch it grow. It is especially rewarding to know that after only a few short months, we have enough money saved up to handle a small catastrophe without having to put more miles on our plastic.
Ideally, your emergency account will eventually have enough in it to get you through several months of unemployment if the worst case scenario should come to pass, but I have friends who have been pleased to find they have enough saved to fund the cost of moving across country or cover themselves when their insurance would not. You might not get there quickly on only $50 per month, but when you can afford more you pay more and trust me, just like debt it will add up except this money is all yours!
By Tara, Free Stuff Finder Contributor
