Putting a buffer between you and life is crucial. In any given month we can run into the unexpected. Whether it is your car breaking down or the potential layoff at work, life doesn’t go exactly as planned. Letting the line of credit become your crutch will only take you further into the place you want to get out of. Having an emergency fund will put a buffer between you and life and here are five ways to put this into place:
- Start doing a budget - Making the money that you currently have behave is the fastest way to have your money work for you instead of against you.
- Get an extra job – There are two parts to the mathematical equation if you want to win with money. Get the income up and the outgo down. More times than not getting the income up is the easier of the two. Whether it is taking overtime at your current place of work or tracking down a part time job for the extra income, doing what it takes for the short term will get you to where you want to go in the long term.
- Sell, sell, sell – It’s not hard to look around and pick out things that you can do without. Especially if you have bought things on credit. Having that beginner emergency fund could be as easy as selling a couple of items that you might not use that often anyway. Even if you did use them, isn’t it more important to change the direction you are going instead of holding on to items that brought you to where you are now?
- Change your habits – If you’re human, you have habits; good or bad. Eating out, buying a coffee, the list goes on. Some things we do just because that is what we do. Take eating out for instance – sure we say this is for convenience, but if we were to do this 3 times a week that can be $120-$150 a month. Instead, why not pack a lunch? You could even make a little extra from dinner the night before and have it for lunch.
- Say No!!! – In a culture that says yes to everything, it is no wonder that the average family is living paycheck to paycheck. A bigger house, a new car, a well deserved vacation… this list goes on and on. Saying no to all the needless wants in life now will enable you to say yes in the future. It is impossible to fill a hole back in when you are still digging out the bottom of it.
It is easy to make excuses and put the blame on surrounding circumstances, but until we take ownership of our situation and understand that it is up to us to make the difference, we will only sit by and watch life pass. If you are wanting to make a difference in your financial future but don’t know where to start, try these five things out.
Photo credit Gerard Van der Leun