Does the concept of saving for the unexpected seem like an impossible task for you? Maybe you are struggling financially or living paycheck to paycheck. When life happens it is challenging to stay motivated to save money for those unplanned events. However, instead of focusing on all the reasons that it is hard to save, consider some strategies for saving. This will help build your financial confidence and set you on the path for saving for the unexpected.
Strategies for Saving for the Unexpected
Automate saving
One way to help boost your confidence is to set up a dedicated savings account for an emergency fund. Even regularly depositing a small amount of money each month into this account will set you on the right track. Make this automatic through your financial institution. Then, you can visually see the progress as you save and this creates more enthusiasm for setting savings as a goal.
Track your spending
Knowing how much you actually spend will help you in determining where you might find the “extra” money to save. Consider tracking all your spending each week for at least a month to see any trends in your spending.
Set a goal
Set a specific money goal each month. For example, I am going to save $50.00 per month until I reach $500.00. After ten months when you reach your goal, set another goal. Then, each time you complete a goal, you will feel more committed towards it.
Plan three to six months of expenses
I’m sure you have heard the guideline to save three to six months of expenses in an emergency fund. Don’t let this guideline discourage you from savings. Remember this is a long term goal, not something that will happen overnight. Setting money aside in a savings account is a journey that you are on.
Reframe saving as an opportunity
Instead of thinking that you’ll never reach your savings goal, think of savings as an opportunity. What opportunity will saving your money make possible for you?
- Will it be to stay out of debt?
- Can it protect you and your family?
- Could it reduce the stress in your life or help you feel in control over a situation?
Reframing the reason to save can help you feel better about putting money away.
Reduce your debt
Make a plan to reduce your debt. Over time, you will save a lot of money on interest and fees. Reducing your debt is a form of saving for the unexpected.
Dream just a little bit. What will you gain for establishing an emergency fund account? More than likely you’ll gain a peace of mind by having some money stashed away for when you need it.
America Saves Week
While savings is not easy, America Saves captures the journey to start saving for the unexpected. When is the best time to save? Everyone’s financial situation is different. For some, it may be with each paycheck, for others it may be when they receive a bonus or tax refund. Figure out what works for you, then make a commitment to #Save4TheUnexpected. #ASW2024 @AmericaSaves #AmericaSavesWeek
I have used America Saves before and I am doing it again for 2024 for those unexpected expenses!
Glenda, this is a great article that I wish I had read and taken to heart years ago!
When I think of all the money wasted over the years buying stuff to make us feel better in times of stress (i.e. going out to dinner, seeing the latest movie, new clothes, etc.), we have another choice or as you say opportunity. We can put the some of this money in a savings account instead. Doing so can prevent the stress of living paycheck to paycheck and avoid the constant worry this lifestyle produces.