If you’ve been reading about personal finance for a while, you know that one thing many financial experts stress is having an emergency fund. Whether it’s $1,000 or 6 months worth of living expenses, it’s important to have some money in the bank for those unexpected life events like a car crash or a medical expense. Of course, starting an emergency fund is a little easier said than done, especially if you have a tight budget already!
So, if you need a couple of tips on how to build up your fund as quickly and efficiently as possible, look no further than the two ideas below.
1. Switch to a Prepaid Phone Plan
The old excuse for not wanting a prepaid phone plan was because most people wanted smart phones. I get it. These days, having a smart phone is convenient and even safer than having a regular phone due to their GPS capabilities.
However, now you can get just about any smart phone you want with a prepaid plan. Some of these plans are only $30 a month, which is kind of crazy since most people spend $100+ for their cell phone plans. If you do switch plans, the $70 you save every month will be an $840 emergency fund by the end of the year. That’s not too shabby for getting to keep the same phone you already have!
2. Work Out With YouTube Instead
I recently found some really amazing work out videos on YouTube. From yoga classes to weight training, YouTube really has it all. Honestly, they are so fun and motivating (and free!) Seriously, what a great side hustle for those YouTube stars! I think the best parts about working out at home with YouTube is that you don’t have to sweat in front of a bunch of strangers in the gym, and you can’t talk yourself out of going.
Plus, giving up your $60/month gym membership will allow you to add $720 to your emergency fund by the end of the year. That, combined with the $840 you saved from giving up your current smart phone plan, puts your emergency fund at $1,560, which is above the amount that personal finance guru David Ramsey suggests.
Ultimately, the biggest pro about these ideas is that I’m not suggesting that you give up anything! You don’t have to turn in your iPhone, and you don’t have to stop working out.
All that’s really required to save for an emergency fund that everyone needs is slightly altering your current habits.
Of course, why stop there? By just altering a few more habits like making your own laundry detergent, renting movies from RedBox instead of going out, cutting out the cable, riding a bike to work, or growing your own vegetables, you can save thousands of dollars a year!
When you think about it in that way, small changes really go a long way to helping you pursue your financial goals. If only all financial decisions were this easy!
Do you currently have an emergency fund? If so, what is the amount that you keep in it?
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