A Savings Plan
Getting your finances on track, especially after being in
debt, can seem like an arduous task. But no matter what your
situation, it is important to build an emergency fun in case
of emergencies. This fun can help you stay afloat in case
of a lay off, illness, family emergency, or other unexpected
How Much to Save The average time it takes to find employment
is four to six months. So, logically, you should reserve four
to six months of living expenses in your emergency fund. When
figuring what your living expenses are, include rent or mortgage
payments, all bills, food, insurance, and other expenses that
are necessities. You can keep as little as three months of
expenses if you have a spouse that also works, though your
expenses from two people are probably higher, making the amount
saved balance out.
Building Your Account To build your account quickly, take
as much discretionary income as you are comfortable with each
month and place it in a savings or other interest-gaining
account. You can have funds automatically withdrawn from your
paycheck so you won’t be tempted to spend it in other ways.
Confused about where to start? Consult your budget and determine
if you can spare just $50 a month to put in your emergency
fund. Because you aren’t really “spending” this money, you
don’t have anything to lose.
A Backup Plan Though it is recommended that you do not use
credit accounts while in a debt management program, having
a credit card can be your back up emergency plan. You should
only use your line of credit on a card with the lowest interest
and only use it in a true emergency. Of course, the best plan
is to have the actual funds saved in a separate account and
you will never have to worry.
Fifty Five Ways to Save
Debt Free Tips