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Life is constantly reminding us of how important it is to have some money set aside for the unexpected. In today’s market, even the smallest everyday things add up quickly.
I’ll be the first to admit that I have my share of sleepless nights worrying about how to make ends meet. Don’t get me wrong, I have a great job and I have the basics covered.
But every month there always seems to be something extra that comes up that I had not planned for. This creates stress for me; and I am not alone.
Americans are Stressed About Money
A study done in 2015 reported that 72% of adults said they were stressed about money in the last month. And despite the improving economy, nearly 90% of Americans surveyed said that the level of stress they are feeling about money has either remained the same or gotten worse in the past year.
Overall, the top sources of money related stress includes: paying for unexpected expenses, paying for essentials like housing and groceries and paying for retirement. (Sound familiar?)
The survey also reported that stress over money is preventing many Americans from living a healthy lifestyle as they try to cope by using unhealthy behaviors like smoking or drinking alcohol. Meanwhile, many reported that their stress levels were causing depression or affecting their romantic relationships. (Cited from study by American Physiological Association reported by CNN.)
I think we can all agree that we’ve felt some level of stress due to worrying over money. It seems that for Americans it is a way of life. But we can determine to overcome this stress and put our minds at ease.
The key is to take control of your (financial) situation. You need to make a plan for unforeseen expenses ahead of time. And you need to determine to stick to the plan.
By taking control of the situation, you also gain peace of mind. Sure, unexpected things are still going to come your way. But you won’t feel so blindsided by them.
A great place to start is with a small Emergency Fund for unexpected expenses. The recommendation is that you start with a minimum of $1000 and then work up to 3-6 months of your salary.
So, how would you like to have $1,000 saved up by the end of the year? It’s early in the year and we still have about 7 months. To break it down, seven months’ times 4 weeks per month is about 28 weeks ($1000 / 28 = $35.71 per week).
If you are able, start saving $36 per week and DON’T touch that money. Set it aside for a true emergency (such as auto repairs or illness).
If your budget won’t allow you to save $36 per week, then I have a list of ideas that will help you find and/or make it so that you can save it.
- Create a monthly budget and go through your past month’s bank statements and see where all your money is going. You will be shocked at how much you are spending on things like coffee and you don’t even realize it.
- Stay out of Debt by not using your credit cards; stick to the plan.
- Create a line in your budget for Saving. Put just $36 per week in savings from now until the end of the year. This could be covered if you would skip your morning coffee 2-3 times per week.
Find areas to cut back on your spending.
- Do you really need to go out to lunch every day? Maybe this is a place where you could cut back to 3 times a week and save the difference. You’ll be pleasantly surprised at how fast it will add up!
- Review your Mobile Phone Bill and consider changing packages and/or cutting any unused lines for a quick savings.
- Find ways to cut back on your grocery bill. If you have a well-stocked pantry, then consider grocery shopping every other week and save the difference.
- Skip going out and plan to have friends over for a casual dinner and/or drinks. You will save a ton.
- Pay with cash. It’s easier to spend less when you are using real money.
- Be mindful of your Thermostat and/or Air Conditioning. If you turn it down (or up) just 3 degrees, it can make a huge difference. If you are cold, put on extra layers. In the summer, put heavy curtain on the windows to keep the hot sun out and your rooms cooler.
Review all your monthly statements from last month for hidden or extra charges.
- It’s a good idea to do an audit of your monthly statement. I suggest you check last month, and review this month when it comes in as well. Are there any hidden or added charges that you didn’t expect? Consider calling the company and disputing the charge for a refund.
- Look for Fees and find ways to eliminate them.
Increase your monthly income.
- Clean out your closets and sell on EBay or have a tag sale.
- Try negotiating your salary at work
- Consider taking a second job.
- Can you freelance? Advertise on Craigslist or in a local group to gain clients.
- Create a No Spending Day once a week.
Some words of encouragement:
Put yourself first. That really is what you are doing when you create a budget and stick to it. You are creating peace of mind because, no matter the situation, you know what you are dealing with. No surprises.
It is easy to get discouraged. When you start to tackle your money issues, it’s easy to lose your nerve and give up. Don’t; your situation many seem impossible, but no matter how little you start with, it is always possible to save. And the sooner you start, the sooner you’ll be on your way to financial – and mental – security.
You got this! If you are ready to get started, then you are a rock star. Taking control of your finances is a huge move and many people never make it. You are one of a few.
Hal Elrod said, “The moment you take responsibility for everything in your life is the moment you can change anything in your life.” Taking control of your financial situation is going to be life changing. It is so worth it and it’s going to cut down on your anxiety and ultimately bring you peace of mind.
One thing that is for sure is that life is unpredictable. But by making a plan, you will be ready when the unexpected comes.
Start today and commit to saving for an emergency fund of $1000 to start. Go through this list and start putting some of these ideas into practice and you will have your $1000 in no time.