Tag Archives: emergency fund

Building an Emergency Fund on a Tight Budget

The existence of a healthy emergency fund is absolutely paramount for any adult. Unexpected expenses and occurrences happen all the time, often when people least expect them. A plentiful emergency fund can, and often does, determine whether or not an individual or family is ruined by financial hardship or able to foot the unexpected bill.

Despite the importance of an emergency fund, not everyone has one. One of the most common reasons is a tight budget. Of course, saving money is critical, but how does one go about doing so when they’re living on a tight budget. Thankfully, there are various strategies which can be used to create an emergency fund, regardless of one’s budget.

Build in Moderation

Many people believe that they can only build an emergency fund by putting aside large sums of money. However, this is not necessarily true. Emergency funds can be built slowly and moderately — and should be for individuals who are on a tight budget. Putting aside $20, $10, or even $5 per week may not seem like much money, but with time and consistency, it will add up fairly quickly.

Reduce Expenses, Increase Revenue

The creation of a healthy emergency fund will inevitably require changes in money management. These changes will involve the reduction of expenses and an increase in revenue. It goes without saying that the more money one has, the more they can put towards their emergency fund. Reducing expenses and increasing revenue will also gradually allow people to put aside larger amounts of funds. Many working individuals have a tendency to consume in greater amounts when their profits increase. However, discipline is certainly required in the process of building an emergency fund.

Set Specific Goals

Believe it or not, having a specific goal in mind can simplify the process of achievement. In the case of establishing an emergency fund, having a specific dollar amount in mind for one’s emergency fund can make a nice difference. Generally, experts advise people to have three to six months worth of living expenses in savings. The amount of time required to establish this amount will depend on a variety of factors. However, each bit of money which is placed towards the emergency fund will ultimately make a difference.

A Final Word

Timing is a huge factor in the creation of an emergency fund. In most cases, the earlier one starts, the better. Even young college students can begin creating their own savings by putting modest amounts of money aside. Building an emergency fund also requires discipline. The temptation to spend money is everywhere; those who constantly dig into their savings in order to fulfill their desire for instant gratification will inevitably find themselves out of funds when a true emergency arises.

 

Authored by Gabrielle Renee Seunagal

10 Ideas For Living a Satisfying Life on a Modest Budget

A modest budget doesn’t mean you can’t live a full and happy life, engaging in all of the activities you enjoy. The problem is that people have become to dependent on money for life satisfaction. It’s been said many times over that money doesn’t equate happiness. If you are making a modest income but you can easily pay your bills and still have a tidy amount of funds left over, there’s nothing wrong with this lifestyle. You can even save a little every month–that’s the wise thing to do. In fact, when you live on a modest budget in Canada (or anywhere) you need to have several expenditure and savings accounts, those like:

  • Emergency savings
  • Vacation savings
  • Holiday savings
  • Everyday expense account
  • Personal savings

This might seem like a lot of accounts to handle and manage, but it’s easily organized. When you live on a specific budget it is even more important to have something such as this established. In fact, this type of living style will help you feel more in control of your finances. We want to share 10 tips on how you can also live on a modest income and still engage in activities you really want to be involved in. Let’s get started.

You Can Enjoy Life on a Modest Budget

Below you’ll find many ways you can enjoy time with the family, or if you’re single, just doing those things that you enjoy doing. Money isn’t an obstacle when you practice the right kind of financial habits! While entertainment can be expensive in Canada (as can dining out) there are strategies to still be a part of that grand life!

  1. When you want to go on vacation but are worried about what you can and can’t afford, how about looking up that college buddy you chat with online? It’s probably been awhile since you visited, so connecting with old friends like this just might gain you free vacation lodging and maybe even some money savings on food too! It’s not taking advantage either, so don’t feel like you’re just being a burden. Just once a year or so is perfectly acceptable. 
  2. Have you ever considered a staycation? It is very likely there are multiple charms in your very own area that you’ve never visited. A staycation allows you to take a rest and enjoy the local arts and crafts in your city. You can choose to do what you want. Some stay in an isolated cabin just to rest and recuperate from the past years stresses. You’re proactive and decide what you’ll enjoy the most, but better yet, you don’t have to spend anything. 
  3. Fine dining doesn’t have to be expensive. You don’t have to think you can never enjoy the higher end restaurants! Go during lunch hour or happy hour and you’ll spend the same amount as you would at a modern middle class joint. Don’t you think you should enjoy the finer things too?
  4. A  movie out costs more than ever today, especially if you’re a family of four. But, the matinee is far cheaper than after 5! Also, some theaters offer concession discounts one day out of the week. 
  5. Instead of signing up for an expensive gym membership, consider starting an exercise routine outdoors. It is totally free and spring is the perfect time to refresh the mind and body!
  6. If you spend a great deal commuting to work, consider bicycling if it is within a 5 to 7 mile radius. You’ll not only save on gas but you’ll get in shape at the same time.
  7. You can sport the latest hair trend without paying a lot! Beauty schools often offer hair cuts, color and style fairly cheap, but you still end up with amazing results. 
  8. If you want to obtain more affordable housing in a nice area then you have to be willing to relocate. A little bit of investigating and word of mouth can help many find a home of their dreams at an extremely affordable value.  
  9. Clothes can be expensive, but everyone wants to look nice. A clothes swap is a great way to freshen your wardrobe and someone else’s at the same time. You can have a whole weeks worth of incredible clothing without paying a penny. 
  10. If you’re looking to fly somewhere on a getaway, take the redeye! It’s cheaper, less crowded and to most, far more convenient. 

These little tips and tricks can help everyday Canadians enjoy a modest life with the same privileges as most anyone else, but most importantly, with supreme satisfaction.

8 Easy Steps To Get Started With An Emergency Fund

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You need a stable financial plan and honestly, you simply must have one today.  The economy has always been a slippery slope, but then, for that matter, so is life.  Having a plan of action is the smart thing to do, but for so many families it is one of the most complex and difficult to achieve.  The steps to getting started with an emergency fund are only as hard as you make them.  You have to be willing to stick to a budget, possibly even a frugal one. You also have to be willing to seek long-term results.

Current statistics across British Columbia illustrate that Canadians 35 years of age and under who have incurred debt are unprepared for an adverse financial event, whether it be from illness or job loss. According to the CNW, an average 70% of “respondents” have significant debt and have no idea what they would do if a sudden illness or crisis occurred.  While you can’t predict personal life circumstances you can certainly be prepared for them.  Here you’ll find how you can begin taking the steps to start building an emergency fund today.

Begin Taking The Steps To Build An Emergency Fund Today

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Start with a positive plan and have a purpose

If you’re going to start positive you need to have a goal, or a purpose for beginning an emergency fund. Once you define what you’re establishing it for then perhaps you won’t be as likely to dip into it. Remember, it’s important to start small and build from this if you hope to make steady progress.  So, know your goal!

Make sure you discipline yourself at the beginning

Have rules related to your emergency fund so you’ll be able to navigate through the uncertainties in a positive manner.  For instance, if you plan to deposit $25 a week then do so and don’t make excuses. Whatever you set your goals to, you need to consistently meet them.  Don’t look for an alternative, stay on course!

If there is no way for you to take steps to get ahead you might look for an alternative

Putting money aside can be difficult for those families who are already having a financially difficult time. You might be able to start making progress if you reach out to a financial advisor or seek out professional credit counseling services to begin taking steps to gain control of your debt and begin setting goals for the long-term.

Set up your emergency savings fund separate from your primary account

If you establish an emergency savings separate from your primary chequing account you won’t be as tempted to spend it.  Furthermore, establishing precautionary measures is simply smart and will definitely help you meet your long-term goal, which is saving money and preparing for your future!

Open an account that will provide you with more interest on your money

You can ask your financial institution about an account that might bear more interest on the more cash you regularly put in.  This might encourage you to save more than what you normally would.  You also want to shoot for an institution with the lower fees but a decent interest rate–and watch your money accumulate faster when you do.

Automate funds into your emergency savings fund

Set up an automatic transfer into the emergency savings fund that you can’t change and treat this just as you would a bill.  Once you deduct the money from your primary account you mark it off as if it is no longer present. Financial experts believe this helps prioritize better, but you’ll never know until you try it.

Look for ways you can cut expenses comfortably

If you can cut back on entertainment or other areas of your life you can grow your emergency fund faster and you can definitely feel more confident in meeting obligations no matter what happens in your life.  If you go out to eat often, cutting this down to twice a week can make a huge difference.  Target what you can live with and what you can live without and go from there.

Don’t sabotage your efforts, stay focused

No matter how large your emergency fund might grow, don’t look for reasons to use it unless there is a real emergency to do so.  Some make rationalizations for doing so, but this can sabotage your long-term goal and get you right back to where you started.  Manage and maintain your goals and stay focused.

Just remember, the smallest savings can be a clear life saver in times of emergency as even a little bit can help with necessities.  This is a process, but once you become comfortable with it, it will become second nature to you and really give you something to feel confident and positive about.

Are you ready image

 

 

 

 

5 Real Life Reasons Why Canadians Need An Emergency Fund

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There is no doubt you’ve read and heard about the importance of having an emergency fund.  In today’s questionable economy, an emergency fund is more invaluable than ever.  You never know when life is going to give you some blows, but they’re sure to happen.  From your water heater going out, on to your car breaking down–you don’t want to be left down and out.  But, without an emergency fund that is exactly where you could find yourself.

Now, this article isn’t about preaching to you, the reader. However, this is about making you more aware of how an emergency fund can really benefit you when you need it the most.  If you’d like to live with less stress in your life, it all starts with maintaining and managing a proper budget!  The emergency fund is a huge part of this.  Let’s take the time to examine why an emergency fund might just be your life saver in a time of crisis.

Why Canadians Should Have An Emergency Fund

According to statistics, within British Columbia 45% of Canadians don’t have an emergency fund and no immediate way to deal with an adverse life circumstance.  The CBIC shows that other residents within British Columbia and surrounding areas have less than a month worth of savings to handle an unexpected life event.  Neither of these classifications are good for anyone, but Ontario and Alberta residents appear to be the most at risk with regard to being prepared for an actual life emergency.  You’ll find several significant reasons listed below as to why an emergency fund will allow you to live more comfortably and with peace of mind.

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5 Reasons To Maintain and Manage An Emergency Fund

While you might be familiar with some of the points within these reasons for an emergency fund, it is hoped you might gain more encouragement to prepare and plan ahead.  Establishing a financial plan now can save you significant stress and heart-ache down the road.

1.  What if your car breaks down?

You have to worry about it, unless you have some other form of protection, but most people don’t. Having some funds set aside to protect yourself for this kind of emergency is absolutely necessary.  How would you get to work, pick the kids up from school, run errands?  Think about it!

2.  What if you lost your job or were laid off?

No one is expendable today and you could be laid off without a moments notice.  Without a cash reserve to keep you afloat how would you make ends meet?  How would you take care of a family?

3.  What if there was a serious illness within your immediate family?

While we hope to remain healthy throughout our lives one never knows, sickness is inevitable.  This can create stress due to a loss of work and a lower income.  Without any kind of fall back plan or savings this can be disastrous!

4.  Could you be financial independent if faced with divorce?

Some couples rely on one another to stay financially healthy, but what if there was an end to your relationship?  Divorce is at an all time high so it makes sense to consider the risks of this happening. Could you manage everything on your own?

5.  What if you face major home repairs or improvements?

If you’re a homeowner you understand the expense this can create and if you don’t have enough home equity built up this can fall on your shoulders.  If it is your AC or a roof repair, it simply can’t wait. Planning ahead is certainly vital to a circumstance such as this.