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How to Start an Emergency Fund, part one

Has saving money always been a goal of yours? Whether you want to save money to get out of debt, have something to help with retirement, or even if you just want to save money to make ends meet each month, you can achieve your goal. Do you want to save money to have an emergency saving account?

It is prudent to start an emergency savings account and this might be what you want to focus on first of all. This account would be used in case an emergency arises. An emergency like an expensive car repair or a broken appliance can cause a lot of stress if you don’t have the money. Advisors recommend you to have at least three months savings in case of a job loss but it will take time to get to this point.

Saving money doesn’t come naturally. It is something that you may have to learn. Some of us were fortunate enough to learn how to save money at an early age, going all the way back to the days of allowances. My sister was the saver, I was the spender. I have to work at saving because I know it is important.

The first thing you must do to start saving is to organize your finances. This is an important step because you need to know exactly where you stand financially. You need to be able to have a firm grip on just how much debt you have. You also need to have a firm grasp on how much you are spending monthly on bills.

In order to get an accurate account of what your expenses are for a month, keep all of your bills and receipts for anything you buy for an entire month. You can’t forget anything though so it’s a good idea to always get a receipt when you make a purchase instead of trying to track down debit or credit card purchases later. At the end of the month, add everything up and see where your money is going. You might be surprised but this will help you figure out what things are necessities, and what things can be eliminated. You can create a budget that will help you to be more mindful of your spending.

Now this is the part that is not much fun: cutting things out. Remember, you are not cutting things out without purpose you are making cuts to beef up your saving. Some of the expendable things that many families can cut from their budget are television expenses, food expenses, and cell phone expenses. Take a look at what you use and see if you can use less.

Read more about how to save emergency funds in next week’s article.

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