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Building up some financial reserves is a great way to get through any sort of crisis situation. Whether you’ve been laid off work or your home has been hit by a natural disaster, the security you gain from this additional balance will make moving forward a lot easier. So that you can tackle these moments easily, you’ll have to build up a decent emergency fund. Here are some of the ways in which this can be done very easily indeed.
Boost Your Take-home Income
The simplest way to gain extra cash for an emergency fund is to increase the amount of money you bring in each month. This can be done in the following ways:
• Temporarily halt payments into your retirement or superannuation fund
• Ask your boss to decrease the amount of taxes included in your paycheques
• Do some additional overtime work for your current place of employment
• Find a weekend or evening freelance job that doesn’t make you exhausted
With a little help, you can boost your income (at least temporarily). This will help you save up for your emergency fund a lot faster, ensuring that the balance grows rapidly over time.
Decrease Your Daily Expenses
You should also see whether there is anything that you can cut down on during your everyday routine. Reducing spending will free up extra cash. This can then be put towards your emergency fund. These cost-cutting measures can be achieved in the following ways:
• Cook food at home instead of eating out. This can be healthy for your bank balance as well as your body, as you can control what goes into your home-cooked meals.
• Grow food at home. If you have a back garden, plant a small vegetable patch so that you can get organic, fresh produce. If you live in an apartment, you can still grow a few potted plants to use for food.
Reducing your expenses works in two different ways. First, you will free up some money to put towards your emergency fund. To find out how long it will take you to build up the right amount, an online saving calculator can definitely help. Second, by getting used to living off a smaller budget, your emergency cash will then be stretched for longer if the worst occurs and you lose your job or your house later on.
Balance Your Insurance
While having some home, health and automobile insurance is a smart idea when planning for an emergency, you should also make sure that you are paying a reasonable rate. After all, some plans are more worthwhile than others, putting the premiums you pay each year to a much better use. Always do your research when it comes to the insurance cover out there. Just because you’ve been with the same company for years doesn’t mean it’s a bad idea to switch to another firm. This is especially true if they offer a much better rate. Here are some other ways in which you can use your insurance to save you money:
• Skip on life insurance if you can’t afford it (but keep it in mind for later when you actually have some cash available).
• Take out some income protection insurance for added stability.
• Use health insurance only if your employer doesn’t provide it and your country doesn’t offer a cheap alternative for medical care.
• Raise your deductibles (the money you first have to pay before the insurance company offers assistance). This will lower your regular premiums.
• If you move house or buy a new car, make sure to change to some coverage that suits your new living situation.
About the Author:
With over 150 years of history in the mutual life and pensions industry, the Royal London Group offer the MoneyVista site, a platform full of effective tools like the saving calculator to assist clients in achieving financial security.
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Most of us know that it is a good idea to save regularly, so that we have a little nest egg put aside in the case of an emergency. However, knowing this and actually doing it are two completely different things, and for the vast majority of folk this is unfortunately not viable, meaning that if they are hit with an unexpected bill it can severely impact on their cash flow.
So, assuming you do not have funds set aside for a rainy day, what can you do if you need to get access to cash quickly? Here are a few suggestions:
Apply for a cash advance from a payday loan lender
Payday loans are extremely controversial, mainly because of the high interest rates and charges which the lenders charge. That said, applying for a payday loan is almost certainly the quickest and most convenient way of getting your hands on some much-needed cash in a hurry. Just make a point of paying the loan back in the due date or else you may find the costs become punitively expensive.
Ask for an advance on your wages
This in some ways is almost like an informal payday advance – only you won’t have to pay interest and charges on it. It depends to a great degree on the relationship you have with your boss as to whether this is a viable option.
Borrow from your family
If all else fails you may have the option of asking close family members or friends for a loan. Do be careful though – before you go down this route, it is worth exploring other options because many a close relationship or friendship has been ruined because of disputes over money.
Arrange a personal loan or overdraft
If you have a reasonably good credit score, you might want to consider asking your bank or building society for a loan or perhaps for an overdraft. One drawback with doing this is it normally entails a meeting with your bank manager, which tends to mean the process is quite slow. Accordingly, this may not be suitable if you need cash fast. Banks have been imposing stricter lending criteria of late – in fact, from the time of the banking crisis at the end of the last decade – which has meant it has been more difficult to get a loan, but with the recent introduction of the Funding for Lending scheme they are beginning to loosen the purse strings just a little.
Pawn your valuables
Another quick way to access cash is to pawn or pledge some of your valuables or jewellery at the local pawnbrokers. Pawnbroking is big business these days and has the significant advantage that you will be able to secure the cash you need the same day. Interest is payable on the loan amount and if you do not redeem the pledge within the time stipulated you could end up losing the item or items you pawned in the first place.
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One of the worst places you can be is deep in debt . The pressure of debt can be enormous and can lead to real problems with our emotional and physical health and wellbeing
The good news is that you can address debt and eradicate it from your life . If you want to get out of debt, then it is probably easier than you think, especially if you are committed to taking certain actions over the course of the next few months.
Here are just a few easy to implement ideas that, put into action, could mean that your debt worries are over sooner than you think.
Collect What is Due To You
How does a large cash injection sound to you right now? Well getting a large cash sum might be easier than you think .
For example, if you have car loan, then you might be able to arrange a vehicle refinance to give you some much needed cash .
Assess Your Finances Honestly
Go through your monthly budget and make a list of all your expenses . The next part is the hard part because then you need to get down to the task of cutting out anything you don’t really need
.You might be surprised at just how much money you can save by doing this, and then that extra cash can be used to repay your debts quicker .
Consider Taking Out A Loan
Most people have a number of debts to a number of different companies, meaning that a loan to consolidate these into one payment is often worth thinking about. Quite simply, by taking this route you can usually lower your monthly repayments significantly, while at the same time making your life easier by only having one lender to deal with.
There are plenty of these options available online. Just spend a little time doing your due diligence on the various alternatives that are available Once you have done the groundwork, get in touch with the companies and see what’s available . You should have a debt consolidation loan in no time at all if you follow this method .
Resist The Urge To Take On Anything Else
There is no sense taking step to cut your costs then signing up for more debt The object of the exercise is to reduce your monthly outgoing to a manageable level, so taking on any new debt is out of the question for now at least
One simple trick if you find credit cards hard to resist is to cut them in two and throw them away .
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Let’s be honest we all dream of a time when we are secure in a financial sense and don’t have to worry any more about money. For most of us that dream will never become a reality, but if you have a degree of self discipline and a plan you are willing to commit to, it can be achievable. The idea behind creating a plan – or a budget in other words – is that it gives you something you can measure your progress against and, if things are not going the way you had hoped, it may allow you to make adjustments to turn things around.
But do not be tempted to over-complicate things – a simple, easy to follow budget will yield the best results because it will by definition, be easier to follow.
Here are a few some simple tips on creating a monthly budget:
Try to save regularly:
You should at least attempt to put away a percentage of your take home pay into a savings account every month. It could just be a straightforward instant access account or perhaps an ISA if you are really willing to commit longer term. The principle is the important thing – it get’s you into the habit of saving. If you have money set aside in a savings account it wlll prove invaluable in the event of an emergency, meaning you won’t have to resort to expensive sources of finance such as credit cards or payday loan lenders
Invest some of your income
This is a longer term strategy than saving. There are plenty of different investment opportunities out there, but you should look upon this as something for the medium to long term, because you will get maximum benefit from funds that tend to be tied up for a length of time.
Look at ways to cut costs
Part of the process of budgeting involves taking a long, cold look at your outgoings. There will be some which you simply cannot do without, such as your rent or mortgage and transport costs. But do you really need to buy that expensive cup of coffee and that muffin each day on your way to work? Or eat out on fast food a couple of times each week because you cannot be bothered cooking? You could buy yourself a nice little coffee machine for the home or office and recoup the cost in a matter of weeks, then save every time you had your favourite drink! Be creative – once you put your mind to it, you will probably be able to come up with loads of different cost cutting ideas.
The foregoing are just a few simple ways you can make the most of your money. There will be plenty more, it just needs a little care and attention. And with the money you save you will be able to afford to treat yourself every now and then or better still, put the money you have saved away for a rainy day in the savings account you have already opened !
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One of the things which has emerged from the global financial meltdown and ensuing recessions of the last few years is that we all need to take a lot more responsibility for our own financial circumstances.
The idea of borrowing money on credit card after credit card, paying back the bare minuimum every month, now seems completely irresponsible, but at the time there was a tendency to accept this type of behaviour as the norm. Things have now changed for the better and we are all much more aware now of the need to seek out sound financial advice to make the most of our income and savings.
So if you are lookimg for advice on matters such as a mortgage, or the best place to put your savings, where should you go?
Perhaps the most obvious answer is to your bank. They will certainly be able to recommend a range of savings and investment vehicles for you, but its worth remembering that they will only recommend their own products and services or products and services from other members of their group.
You should really be looking for truly independent financial advice - to have someone survey the entire investment, savings and mortgage market for you, so you can be sure that no matter your requirements you can be confident you have got the best deal out there, given your circumstances.
For this kind of advice you should look for the hep of an experienced financial adviser or perhaps an accountant or solicitor. They are able to operate independently of banks or other financial institutions to recommend a product or account that best meets your specific requirements, rather than one which pays the highest commission.
