Today kicks off America Saves Week, a week dedicated to encouraging American consumers to build wealth wisely by paying off debt and increasing their savings. Only 66% of Americans spend less than their income and save the difference.
Save for Unexpected Expenses
Only 66% of America have sufficient emergency funds for unexpected expenses like car repairs or a doctor’s visit. Life happens. We’ve seen the insurance commercials; Mayhem lingers everywhere. It’s up to us to be prepared for life’s change of courses, life’s emergencies.
Your goal today is to start an emergency fund. If you can, start several types of emergency funds, short-term and long-range. Start with a basic $500 emergency fund, and then slowly build up your other emergency funds. Make your savings a permanent part of your budget even if it’s only $5 a week. Over a year, that $5 adds up to $260 plus interest as long as you don’t touch it.
You can save all of the money in one savings account or you can take advantage of the multiple savings accounts offered by online banks like ING Direct (now Capital One 360). The online banks make it easy to set up automatic savings plans which can be targeted for different goals. If you have a specific date for your goal, a short-term CD may give you a higher interest rate plus keep your money safe while you continue to save.
- Car repairs
- Appliance repairs
- Home Repairs
- Minor home repairs
- Appliance replacement
- Car replacement
- Major Home Renovations and Repairs
- The Unexpected/The Unknown
Ways to Save
- Automatic savings from your paycheck.
- Save a portion or all of your tax refund.
- Save bonuses and salary increases.
- Do side jobs.
- Save rebates and refunds.
- Save spare change in a jar or find a bank like TD Bank with coin machines and deposit the change into a savings account.
Tomorrow: Pay off High-Interest Debt
Barb is a mom of 5 kids who spends her day keeping track of socks, stuffed animals, library books, and a 4 year old when she isn’t writing about all the frugality, gardening, cooking, and reading she manages to fit in between the chaotic moments. She can be found at A Life in Balance, Frugal Local Kitchen, or on Twitter with daily doses of life in 140 characters or less.