How To Start An Emergency Savings Fund While Living Paycheck To Paycheck
If there’s one thing financial experts agree on, it’s that having a well-funded emergency savings fund is one of the pillars of financial security. And yet, over 50% of Americans are living paycheck to paycheck and wouldn’t be able to cover a $500 expense without resorting to debt.
When asked, the majority of them will say they want to set up an emergency savings fund, they just don’t know where to start. If you’re facing a similar problem – here’s where you can do to get started.
3 Questions You Should Ask Yourself Before Setting An Emergency Savings Fund
1. Do You Know Your Income?
Many people are living paycheck to paycheck simply because they don’t know how to move the money they have around. Sure, they know their gross income, but their net income? That’s a question many find difficult to answer.
You need to figure out the money you’re working with. And that means knowing what’s left of your paycheck when all the taxes, deductions, and contributions have been covered.
2. What Part Of Your Spending Is Necessary Spending?
Not everything you’re spending money on is necessary. Hold a second! No need to get aggravated. This is true for everyone, not just you. There are fixed and flexible mandatory expenses we all have – and then there are unnecessary fixed and flexible expenses that vary from person to person.
We all need to pay for food, the roof over our heads, utilities, transportation, etc. Those are mandatory expenses, even if they take different forms for different people (mortgage vs. rent, MetroCard vs gas, etc.). You need to take a look at your bank transactions, divide your expenses into mandatory vs unnecessary ones, and get to work.
3. What Part Of Your Spending Could Be Cut?
And by work, we mean cutting non-mandatory expenses, at least some of them. How many subscription services are you using? Leave only one. How many times do you eat out in a week? Pre-plan your meals, take lunch from home, and budget for eating out 1-2 times a week as a treat. Everybody has unnecessary expenses. Everybody, no matter how much they make. Cutting down on them is a universal way of freeing up cash for the emergency savings fund.
Either Way, Pay Yourself First
The easiest way to avoid spending money is to make sure there’s no money to spend. Automate your savings transfers so that a set amount from your paycheck will go into your savings account before you get a chance of even taking a look at it. Out of sight, out of mind, as they say. At least, until an emergency hits.
Get Started With Your Next Paycheck
The hardest part of setting up an emergency savings fund is making the first step. Don’t try to make big changes from the get-go. Just open a savings account and make the first contribution with your next paycheck, even if you’ve yet to figure out your budget. The deposit you need to set up the savings account can be your first contribution.
What To Do Without An Emergency Savings Fund
The problem with setting up an emergency savings fund is that it takes time. It can be hard to find your groove in the beginning and that means putting a substantial amount of money, enough to cover an average emergency, might take some time.
If an unexpected expense pops up while you’re still setting up an emergency savings fund, you might want to look into our completely online title loans offered by At Home Title Loans.
How To Get A Title Loan
To qualify for a title loan with At Home Title Loans, you’ll need a state-issued ID proving you’re over 18, your car, and the car’s lien-free title in your name. We offer our clients completely online title loans, so you can easily get started from the comfort of your couch. You’ll just need to fill out and submit an inquiry form on our website.
Here’s how title loans work: our loan specialist will get in touch with you as soon as your form gets processed to provide the necessary information and determine the terms of your loan (how much money you qualify for, your monthly payment, etc.).
After the terms are set, they’ll set you up for a meeting with our verification agent at a location of your choice. The verification agent will need to verify your VIN-number and have you sign some forms. If everything’s in order, you’ll get documents for the e-signature in the mail.
Get Your Emergency Fund Today!
Do you need to cover an unexpected expense and have yet to set up an emergency savings fund? Our completely online title loans could help!
With our simple and completely online title loans process, you can get the emergency cash you need in a day! Just submit a short form on our website and get up to $15,000 in your bank account the very next bank business day!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.