GBTI has been in the banking business long enough to know that many people live paycheck to paycheck with little or no money put aside for emergencies. Whether you are making a good living, you are scraping by, or your financial situation falls somewhere in between, you’ll run up against an emergency every now and then.
Emergencies are unavoidable in life and many of them require financial resources to address. Here are some ideas to boost your savings so that you can handle urgent situations with less financial stress.
Budgeting can be tough. When you look at your earnings versus your expenses, it’s understandable if you feel there’s just no room for emergency savings. Do not despair—begin with whatever you can. Even squirreling away a few dollars here and there is a solid start and, as you see your savings slowly build, you’ll feel inspired to keep going.
Saving any amount is better than nothing. While it may not be enough to cover something unexpected like the cost of replacing a home appliance or repairing a vehicle, whatever savings you’ve accumulated will definitely help.
Turn Saving into a Game
See if you can trick yourself into saving more. Some people find it works to empty their pockets or purse of smaller denominations or change at the end of the day and set it apart for savings. Just a few dollars here and there quickly adds up.
You might find that tucking away a $20 bill when you take cash out of the ATM at payday and seeing how long you can make it last is helpful. Look for ways to challenge yourself to spend a little less and save more.
Keep Savings Separate
Whatever you do, make sure to park your emergency savings in a separate account from the ones you use for regular banking. For instance, you may already have several personal accounts at GBTI. Most people have a checking account, where their pay is deposited, to use for making mortgage, rent or car payments and settling other monthly bills. Some also have a savings account for irregular expenses.
If you’re trying to juggle all your financial obligations and emergency savings in one account it can be nerve-wracking, not to mention impractical. Therefore, it makes sense to have a different account for unexpected expenses.
Make Saving Automatic
Making your emergency savings automatic is one of the best pieces of advice GBTI has. This means setting up an amount for GBTI to move every month from the account where your earnings are deposited to the savings account that you’ve designated for unpredictable events.
Having the bank take care of this transaction for you ensures that you’ll not forget or change your mind and spend the extra cash. Plus, when you do not actually have to handle the transfer on your own, you can pretend that your income is that much less.
From time to time, you may find that you receive a small windfall. Perhaps you get a refund from the government on your income taxes. Maybe you were given some money as a gift or have earned a little by selling used items or doing some short-term work for someone. Maximize the impact of this unanticipated money by putting it directly into your emergency account.
Here’s another helpful approach. When your salary grows, simply increase the amount of your automatic deposit into emergency savings by the amount of your raise. It will assist to build up this account faster instead of adjusting your spending to incorporate your new take home pay.
Try Specific Accounts
As your savings starts to grow and benefit from compound interest over time, you can fine-tune your approach by setting up specific accounts with GBTI for different types of unforeseen circumstances. What accounts you choose will depend on what makes the most sense for you.
For example, depending on your situation, you may choose to fund an account specifically for vehicle maintenance, since it can be expensive to keep your car on the road. If you have a large family whose members are spread out from one another geographically, you may choose to fund account dedicated to urgent travel to see loved ones in a family crisis.
Having an emergency fund in case of job loss may also give you peace of mind. You can rest easy knowing that you will be able to cover several months of lost income while you find other employment. Entrepreneurs with variable income or those whose work is seasonal in nature may also benefit from saving in advance. That way, you don’t have to worry during the times that are less busy.
In short, emergency savings will make you feel better equipped to handle your finances no matter what comes along in life.