Budgeting For Emergency Funds: You Can Do It! by JNFRD

Emergency funds are considered to be a necessity as far as financial security is concerned, since it can provide one with financial resources that one can resort to and depend on when an emergency arises such that when one is sick and have the burden of paying huge medical bills, or unexpected home or major car repair.



When one has no emergency fund, one can be obliged to acquire debt on your credit card that might take several years to repay with interest that would later cost so much more.



However by putting an extra thirty to fifty dollars every month in an individual "emergency savings account" one can be secured with what emergency the future may bring. In doing this, it is recommended that one regards the emergency fund as an additional bill, to be punctually paid each month.



Yes, one can and should budget and allocate the extra money for emergency fund, as this is very significant when one refers to his "financial future." Here, the goal is to create savings from budgeting your income; the emergency savings should ideally be equal to at least three months your living expenditures.



What's important is that you should steadily put a certain amount of money aside, and only use it for real emergencies.



Not like an investment, the success of one's long-term savings funds does not really count on the amount of return or interests but on placing a fixed amount of money away constantly and steadily so to have immediate access to it at all times.



In spite of one's financial status, the initial step in the process of constructing an emergency fund is by knowing where your money is presently being consumed or spent.



When one recognizes and determines where one's earnings are spent, then it will be easy for one to choose and make a decision where to trim down expenses. In other words, budget.



Budgeting is putting or setting aside money for anticipated and unanticipated future use. It is here that one sets up a goal so as to save. So set an emergency fund as your goal.



Checking, savings, money market accounts and "certificates of deposits," are great places to keep one's cash that might be needed on quick notice.



The amount saved from budgeting can either go to your savings goal, emergency fund or both. One could utilize the money saved from budgeting financial expenses by saving half of it to your savings account and half of it for emergencies. This way, you achieve your goals in savings and at the same time put in funds for emergency use. It's your choice.


For more tips on how you can live on a budget and save, visit http://ucanliveonabudget.blogspot.com/


Article Source: Budgeting For Emergency Funds: You Can Do It!

2 Easy Steps to Building Up Your Emergency Fund by Financial Freedom

An emergency fund is basically 3 to 6 months of income that you set aside which you can withdraw easily. This means that the fund is most probably in a bank account that you can easily tap into should any emergency arise.



Step #1 - Open Another Bank Account



Yes, you heard me right. Why do you have to open another bank account? It is very likely that if you were to start saving money into the same bank account, you will most probably spend the money without knowing it. The most important thing about an emergency account is to keep it out of sight from us so that we do not spend the money!



Many years ago, I wanted to set aside an emergency fund of 6 months income. It was however only 2 years ago that I managed to do so. The reason for the long delay was that I was simply spending all my money in my only bank account which I had. Whenever it reached a certain amount, I would think to myself: "Hey, I've got lots of money....why not I buy this?"



To cut a long story short, I could not succeed in building up the 6 month emergency fund because I had easy access to the account. I started withdrawing money from the fund as it was not kept separate from my other bank account. This is my BEST advice to you: OPEN ANOTHER BANK ACCOUNT.



You will of course want to make sure that this bank account does not have any high charges and stuff for things like minimum balances.



Step #2 - Deposit a FIXED sum of money EVERY month ONCE you get your paycheck



Keeping a separate bank account is Step 1. For Step 2, it requires a certain amount of discipline. The key is to deposit a FIXED amount EVERY month the DAY you get your paycheck.



This is speaking from my own personal experience. The day that you get your pay check credited into your bank account is THE DAY that you must deposit that fixed amount of money into your separate bank account (your emergency fund account).



Do not wait for a few days because once you procrastinate, you will most probably not do it and end up not depositing any money at all for that month.



Let's say that you decide to save $500 per month to build up an emergency fund. All you have to do is simply deposit or transfer the money from your normal banking account straight into the emergency fund account the moment you get your paycheck. This is to prevent yourself from spending it before you carry out the transfer.



Do this EVERY single month until you have built up your emergency fund to your desired level of 3 to 6 months income. No excuses.



Every month, you will stick to the amount you have decided and deposit it into your emergency fund the moment you get your paycheck.



Slowly but surely, you will see that your emergency fund account will start to grow. Make sure that you do not withdraw any money from it unless for emergencies.



So there you have it. 2 simple steps that anyone can take to start building up an emergency fund.


SgFinancialFreedom is a blog dedicated to help people achieve their financial freedom. This is done through the sharing of knowledge, information and experience. Find out more about the author and his journey to financial freedom at http://sgfinancialfreedom.blogspot.com


Article Source: 2 Easy Steps to Building Up Your Emergency Fund

5 Reasons Why You Struggle Financially

Five Reasons Why You Struggle Financially
By Nadege Lewis

Many of us struggle to put our financial lives in order. Our money situation only seems to get worse with each passing day. The financial strain is unbearable and you finally decide that you are no longer desire to accept your circumstance as reality. Understanding the root causes of the problem is the first step towards improving. Here are the main reasons why your financial situation is not where it should be.

You have no idea where your money is going

The main reason why your paycheck has a lifespan of a fruit fly is not because of the amount of money you earn. A person can earn $10,000 a month but if they spend $10,100 a month, that person will be broke. This is the why we often hear the accounts of lottery winners losing all of their money in a relatively short amount of time. If you can not account for every dollar spent from your last paycheck, you are at risk of losing your hard earned cash on frivolous spending without even knowing what happened.

You do not put your money to work

Your money can work harder for you than you can work for your money. Unless you understand the way money works, you will continue to wonder why you can not accumulate wealth. Saving is a good thing, but investing your money is better. The absolute best thing you can do for your financial health is think your money as employees and make them work as hard as possible to bring more income for you.

You buy things you can not afford

When you make purchases with your credit card and fail to pay off the balance when it becomes due, you bought beyond what you could afford. The math is simple. One minus two equals to negative one. Financially sound people seek to obtain a positive net worth. As long as you continue to spend in a way that maintains your negative worth, you will struggle in your finances.

You do not plan for the future

Part of the reason we use credit cards is because we did not save for a rainy day or expected emergencies. Looking ahead is an important aspect of your financial health. A portion of the income you receive today should be allocated towards your future. Planning for your future will ensure that you do not have to struggle during your retirement. Planning for your future will ensure that you will even be able to retire.

You do have not financial goals

Without financial goals many of us remain in a cycle of struggling. Months, even years pass and we wonder why our money situation has not magically improved on its own. Goals are a key aspect of evolving financially. Your first goal should be write out measurable short and long-term objectives which will bring your finances to the next level. Goals keep us motivated. Without them, we wander aimlessly paycheck after paycheck without putting a purpose to our money. If our money does not have a purpose, we suffer the fate of having an ailing financial life.

These are five simple things that you should avoid doing when it comes to your money. If you are diligent to making sure that you abstain from committing these financial faux pas, you will begin to create new money habits. These habits are the foundation of wealth building that will positively impact your financial resources.

Nadege Lewis is dedicated to helping people learn fundamental principles that bring about financial freedom. Decide today to create Wealthy Habits that lead to financial freedom. Visit http://www.wealthyhabitsnow.com for free information that will change your financial life.

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Start Building Your Savings

Where To Start With Building Savings
By Jennifer Tannehill

When I began getting my finances in order, I couldn't wait to get started but I was perplexed. Where should I start? Some experts say, "Pay yourself first" meaning retirement, some say get your debt paid down, while other suggested beginning with an emergency fund. And, those are just the top three, there are many other schools of thought. I asked around. No one agreed on any one method. I read Suze Orman's new book Women and Money. It was a great book, but it could not answer this question to my satisfaction.

I did a lot of research on the net and I came up with my own plan. Here are the steps and my reason for putting them in the order that I did.

1. Start a small emergency fund. I will start by paying the minimums on my credit cards until I have socked away around $500 to $1000. I think this is the best first step because without some free flowing cash I will have no choice but to use plastic if I have any unexpected expenses. I am limiting it to just $1000 at most because I figure that would cover an ER visit, a replacement appliance, or car problems. I just hope I don't ever have all three at once!

2. Begin paying off the credit card debt. One note here, if you are already paying into retirement keep doing so unless you are not able to pay off your existing debt. In paying off debt, almost everyone agrees- you must pay more than the minimum balance due on your cards. However, there are two methods to choose from. The first is to pay off the card with the highest interest rate first. This makes sense because that is the one that will end up costing the most in finance charges. But, if you are anything like me, you like to see progress. Another way to go is to throw the most money at your smallest debt first. That way you see $0 balances sooner giving you a little pick-me-up on the long road to debt repayment. Whichever you choose, pay the minimums on all but the card you are trying to pay down first. Put more money toward that card, but once it is paid off keep putting the same amount toward your debt. In other words, if I am paying $200 on my high rate card and I pay it off, I am to put that money toward the next card. Then repeat the same process until all the debt is paid.

3. SAVE. It is a good rule of thumb to have several months of income saved up in the event that you are laid off, become ill, or cannot work for one reason or another. At this point you can start putting more money into your emergency fund. Once you have that built up, begin saving for retirement if you are not already doing so. How you choose to save is up to you. Step three really requires its own article. Briefly, if you get an employer match on your 401K at work fund it to get the full match, hey, that is FREE money. If you don't get a match or once you have funded up to the match, try to max out an IRA. The type and amount you can invest depend on your income and your age respectively.

I hope this has given you a starting point in getting your finances in order. When I began looking I just wanted a simple plan to follow. I ended up having to make my own. Try it, tweak it, but do something. The worst mistake you can make is to do nothing. Know that no matter where you begin, taking small steps toward dealing with debt and saving will eventually turn into a change for the good.

Jennifer Tannehill maintains a personal finance blog at http://picturewealth.blogspot.com
Please check it out!

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