The Family Wallet http://thefamilywallet.com Money Tips For Your Family Fri, 17 Jul 2009 09:55:30 +0000 http://wordpress.org/?v=2.7 en hourly 1 TheFamilyWallethttp://feedburner.google.com Eight Ways to Budget for a New Addition http://thefamilywallet.com/2009/07/eight-ways-to-budget-for-a-new-addition.html http://thefamilywallet.com/2009/07/eight-ways-to-budget-for-a-new-addition.html#comments Fri, 17 Jul 2009 09:50:09 +0000 D.J. http://thefamilywallet.com/2009/07/eight-ways-to-budget-for-a-new-addition.html Pregnancy is exciting. It’s a time filled with baby showers, ultrasounds and nursery redecorating. It’s a time of joyful anticipation. And it’s a time to think about your household budget.

But moms- and dads-to-be often forget about that last item. With everything that’s currently going on and upcoming, money matters can easily be the last thing on their minds. However, a new addition to the family will have a significant impact on the budget, and it’s very important to consider this ahead of time. Here are eight things you can do to prepare for the baby and keep your finances in order.

1. Start saving extra money as soon as you learn about the pregnancy. Those first few months won’t be as expensive as mid to late pregnancy, so you should be able to put a fair amount of money away. This fund will be helpful when it comes time to buy things like maternity clothes, baby furniture or a stroller.

2. Seek out deals on basic needs such as diapers, wipes and baby wash. Clip coupons from your Sunday paper or find them online, and then check your favorite stores periodically for sales. You’ll be glad that you stocked up on these things later on.

3. If you know the baby’s gender, put the word out to friends and relatives. They may have some baby clothes that you can use. Even if the gender is uncertain or you want it to be a surprise, you can probably get some donations of neutral clothing to help you get through those first few weeks.

4. Start checking out prices on things your baby will need on a regular basis. It may be difficult to determine how much formula she will drink or how many diapers she will go through in a month’s time, but at least you’ll have a general idea of what to expect. You may want to give it your best guess and work on a tentative budget to give yourself a head start.

5. Understand that a new addition to the family will raise many of your expenses. You’ll buy more groceries. You’ll use more electricity warming up bottles and turning lights on in the middle of the night. You’ll use more water giving baths and washing tiny clothes and bedding. Take this into account when planning your post-birth budget.

6. Resist the urge to take the easy way out when it comes to meals. When you’re tending to a newborn, it’s easy to fall into the habit of eating takeout and convenience foods. But cooking is less expensive and far healthier for you and your family. Ask other family members to help with food preparation so that it won’t be such a chore.

7. Set some money aside for medical expenses. Babies need several check-ups during their first year of life, and they’ll also need medical attention in the event of illness. Health insurance helps a great deal, but you’ll probably still have some out-of-pocket expenses such as copays and over-the-counter medications.

8. Weigh your childcare options. If a parent plans to stay home with the baby, it will significantly affect the budget. If you take him to daycare or a sitter, it will also have an impact. It’s important to carefully think things through before you make a decision and adjust your budget accordingly.

When there’s a little one on the way, it’s important to think about the financial implications. Planning ahead will make things easier when your bundle of joy arrives, allowing you to enjoy those first months and years without worrying about money.

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]]> http://thefamilywallet.com/2009/07/eight-ways-to-budget-for-a-new-addition.html/feed Become a Landlord and Earn Money http://thefamilywallet.com/2009/07/become-a-landlord-and-earn-money.html http://thefamilywallet.com/2009/07/become-a-landlord-and-earn-money.html#comments Thu, 16 Jul 2009 09:14:53 +0000 D.J. http://thefamilywallet.com/2009/07/become-a-landlord-and-earn-money.html When thinking of ways to earn income without working by the hour, becoming a landlord often seems like the perfect option. Those who are retired can supplement their income without going back to work, and those who need extra money can get it without working longer hours or going back to school. But being a landlord is not as easy as it may seem.

Still, renting out properties can be lucrative. Here are ten tips to help you get started.

1. Be aware that financing for rental properties is much different than financing for a home you intend to live in. It requires a much larger down payment, and interest rates are usually higher. If you have a home that’s paid off, you might do better to buy a new one for yourself and rent the old one out or take out a home equity loan to purchase the property. A knowledgeable real estate agent can help you decide.

2. Look for deals on investment properties. Foreclosure sales are a good place to start. You can often find homes that have been foreclosed on in good condition for rock bottom prices.

3. Beware the fixer-upper. Buying a property that needs work might seem like a good way to get a deal if you can do the work yourself, but such properties often end up costing you more than you think. If you choose to buy a fixer-upper, be sure to have it inspected and get estimates on needed repairs (or the supplies to do them yourself) before proceeding.

4. If you want to start making money right away, consider buying a property that already has tenants. They’re harder to find than empty ones, but they are out there. Just remember that you will be required to abide by the terms of the current lease until it runs out.

5. Decide how much you will charge for rent. You need to make enough to cover your costs and make a profit without charging so much that you won’t be able to find a tenant. Consider your mortgage payment, taxes, insurance, and estimated average monthly repair costs. Then do some research to make sure your rate is competitive.

6. Decide whether or not to utilize a property manager. Hiring one will eat into your profits, but it will also keep you from having to deal with repairs and maintenance.

7. Write up a rental contract. There are contract templates available online, but it’s best to have a real estate attorney help you with this. He will know all of the ins and outs of landlord/tenant law.

8. Find tenants if you don’t already have them. Place ads in the classified section of the local newspaper, put fliers up around town, and advertise online on sites such as Craigslist. If you live in a college town (and are not opposed to the idea of having college students as tenants), place some fliers around the school to get a quick response.

9. Screen potential tenants carefully. It’s a good idea to get a criminal background check and some references. Renting to criminals or bad renters is not a good way to start out your career as a landlord.

10. Be aware of your responsibility to provide notice for such things as inspections, maintenance and eviction. The requirements should be outlined in your contract and must be in line with state law.

There is a lot involved in becoming a landlord. But it’s a great way to make money with little ongoing effort. You will have some responsibilities, but if you take the time to choose good tenants, things should go fairly smoothly.

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]]> http://thefamilywallet.com/2009/07/become-a-landlord-and-earn-money.html/feed Use Pharmacy Coupons and Save Money http://thefamilywallet.com/2009/07/use-pharmacy-coupons-and-save-money.html http://thefamilywallet.com/2009/07/use-pharmacy-coupons-and-save-money.html#comments Wed, 15 Jul 2009 10:36:42 +0000 D.J. http://thefamilywallet.com/2009/07/use-pharmacy-coupons-and-save-money.html It’s about time that pharmacies have joined the coupon bandwagon. For years, grocery stores have offered cents off coupons to attract customers. They buy a particular item, use a coupon, and the customer saves a little bit of money. The grocery store then turns those in and is reimbursed. It’s actually a win-win situation that many pharmacies have been neglecting.

Larger chain pharmacies such as Walgreens and CVS have started printing their own coupon books to entice customers to come to their stores. Quite often the coupons can include buy-one-get-one-free items. Customers to these stores, if they shop wisely, can save a good deal of money.

Pharmacies under the Rite Aid banner have a sign-up page on their website where you can sign up and immediately receive $50 worth of coupons, as well as special product offers and other services you may find useful. You can even receive $50 if you transfer two prescriptions over to Rite Aid.

Pick up coupons at the pharmacy as you are walking up and down the aisles while waiting for your prescriptions to be prepared. If there is a coupon for the same brand of deodorant your husband uses, even if he doesn’t need any today, you can still start your frugal pharmacy routine now instead of putting it off. Simply go up and down the aisles and see if there are coupons available for any of your regularly used products, and check the expiry date. If you have a few weeks or even months before the expiration date, it never hurts to pick them up now while you have them on your mind.

Visit the websites of your favorite manufacturers, such as Robitussin or Johnson & Johnson. Even those sites of your preferred vitamin brand, hair care products or facial cleansers could have offers available on their sites, potentially allowing for extra discounts if your particular pharmacy allows for doubling up on coupons.

Finding those wonderful two-for-one coupons work great, especially if they are for your usual brand of shampoo or conditioner and you pharmacy allows for doubling up on coupons. You could potentially end up paying a dollar or less for two bottles of brand name articles. It may not seem like a lot saving 30 cents here or a dollar there, but if done wisely, people could potentially save $100 or more in the course of a year with the proper use of coupons.

Don’t forget to ask your doctor or health care professional if they happen to have any samples or coupons which they could pass out to you. When different pharmaceutical companies their offices deal with put a new product on the market, they either receive sample sizes, coupons or both. They are so busy most of the time they forget to mention them, but if you ask, they usually have one or the other. Maybe even both.

It’s the same situation at pharmacies. They don’t always remember they have particular rebate or mail-in rebate coupons, especially on high-ticket items such as glucose monitors or blood pressure monitors. By watching for coupons online or at the pharmacy itself, if you are prescribed one of these monitors you are usually able to get one free, with the coupon along with the purchase of any lancets in the case of the glucose meters. This can become a considerable savings to you, as these monitors aren’t cheap.

So before heading to the pharmacy, don’t forget to check online for any coupons you could use, as well as what is available at the pharmacy itself while you’re waiting for your prescriptions to be filled. What better pastime is there than saving money?

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]]> http://thefamilywallet.com/2009/07/use-pharmacy-coupons-and-save-money.html/feed Enjoy an All-Inclusive Cruise that Won’t Break the Bank http://thefamilywallet.com/2009/07/enjoy-an-all-inclusive-cruise-that-wont-break-the-bank.html http://thefamilywallet.com/2009/07/enjoy-an-all-inclusive-cruise-that-wont-break-the-bank.html#comments Wed, 15 Jul 2009 09:32:21 +0000 D.J. http://thefamilywallet.com/2009/07/enjoy-an-all-inclusive-cruise-that-wont-break-the-bank.html With the variety of cruise offers in the market, every day there are more and more people searching for the complete cruise vacation experience. An all-inclusive cruise package is one which leaves you with little else to worry about than enjoying your vacation.

This means once you’ve paid for your vacation package, for one price you get a stateroom, meals and a variety of entertainment every night - from production shows to chamber music. Dining is your choice of casual or formal, and 24-hour room service is provided at no charge. All that’s left is for you to enjoy your vacation and the locations you will be visiting.

When you begin planning your vacation, keep in mind what you are looking for so that you choose the right package. There are many packages available, meeting every need imaginable: adult only, family cruises, honeymoon cruises, golf cruises, spring break cruises and more. You definitely have a lot to choose from.

When choosing any all-inclusive cruise, be sure to keep your budget in mind. There are many options because there are a lot of cruise ships. Take the time to search the internet; it can result in a selection of offers allowing you to do more in-depth research. It may also be wise to contact your travel agent, as they are of immense help when it comes to finding the perfect all-inclusive cruise for your vacation.

Below you will find a list of some ways to save big money on cruise tickets. Although some of them require quick decisions, others may be more suited to your personal needs.

Early Booking Discounts

This type of discount is one which is available from most cruise lines as well as for most itineraries. By booking before a certain date, the cruise line offers you a special discount price. These discounts may not be exactly the best price you can get; however, by booking early you will usually get the cruise you’ve always wanted on the cruise ship you desire, while also getting your itinerary of interest as well as your suite or stateroom of your choice. By simply combining these items can make this type of discount the very best in your dream cruise.

Last-Minute Discounts

Although this is a risky plan to count on, it is still one of your options. You may find yourself with no extra room on the cruise when you decide to take your chances on a vacancy. There might also be an issue of only inside rooms being available when your preference is a balcony stateroom. When all is said and done, however, these discounts are often the absolute very best price. If you have the opportunity to be impulsive, this may be your best bet.

Low Season Discounts

Picking the ‘low seasons’ for cruise vacations can often leave you with quite the discount. If you take the Caribbean for example, their ‘hurricane season’ can provide a good many great cruise rates for potential passengers. A more appropriate label for this season would be ’summer’. Today’s cruise ships can change course to out-run potentially bad weather. In a worst case scenario they simply divert to calmer waters. If you were vacationing at a resort, you’d be stuck where you are until the weather cleared.

Value Added Cruise Pricing

The price of this type of ‘discount’ does not change per se. However, it does give its guests added perks and specials. These could include room upgrades, or on-board credits. The cruise line assigns a credit to your room for you to use on additional features which may not be a part of your package. Another type of perk you could receive is free t-shirts or other items with the cruise ship’s logo, or even a free bottle of wine in your room.

In the end, remember that all-inclusive cruises are the perfect way to have a no worries cruise vacation. Just take your time choosing the right package for you and you are guaranteed to have the time of your life.

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]]> http://thefamilywallet.com/2009/07/enjoy-an-all-inclusive-cruise-that-wont-break-the-bank.html/feed Top Savings Accounts for Your Nest Eggs http://thefamilywallet.com/2009/07/top-savings-accounts-for-your-nest-eggs.html http://thefamilywallet.com/2009/07/top-savings-accounts-for-your-nest-eggs.html#comments Tue, 14 Jul 2009 10:43:19 +0000 D.J. http://thefamilywallet.com/2009/07/top-savings-accounts-for-your-nest-eggs.html Savings should be a part of everyone’s financial plans. We all need some money put back for a rainy day. Saving for our children’s college education is also important. And having a retirement fund is a must.

Putting our savings under a mattress isn’t a very good strategy. Not only could it be stolen or burned up in a fire, but it doesn’t earn interest. Putting our savings in the bank keeps it safe and allows it to earn interest, allowing us to come out ahead. But how far you come out ahead depends on the bank and the account you choose.

When it comes to general purpose savings, most people opt for a regular savings account. Such accounts earn rather low interest, but they give us quick and easy access to our money. Some banks allow us to link them to a checking account for quick deposits and withdrawals, and some even provide debit cards.

In order to earn higher interest rates, we must usually deposit larger amounts of money. Some accounts pay varying interest rates depending on the balance. Others have a minimum balance that must be met to avoid fees, but pay higher interest no matter what the balance. And then there are money market accounts and certificates of deposit, which are best suited to those who plan to leave a significant amount of money in the bank for several months or years.

For retirement savings, a 401K is usually the best option. These plans are made available through employers and allow employees to make pre-tax contributions from their earnings, and interest earned is not taxable. The employer may even match the contribution up to a certain amount. If a 401K is not an option, an IRA can be opened at a bank. Contributions are made with after-tax dollars, but the interest earned is not taxed.

There are a few options for college savings. A 529 plan is similar to an IRA, but is used for college expenses instead of retirement. The Coverdell ESA is often used in conjunction with a 529 plan, but there are some differences such as contribution and age limits.

When planning to open a savings account of any kind, it’s important to do some research. High interest rates are a definite advantage. But you also need an account that gives you the level of access to your money that you want. Fees should also be taken into consideration, as they can cancel out your interest earnings.

Credit unions are one of the best places to start your search for a savings account. These member-owned institutions usually offer competitive rates and many other benefits. Membership is usually restricted to those who live in certain areas or work for certain companies.

Online banks have been giving traditional banks a run for their money when it comes to savings accounts. They tend to offer more competitive rates, and may offer features that you can’t get from your local bank. But some local banks are more competitive than others, and they offer something that online banks cannot: face-to-face service.

Finding the right savings account can help you get the most out of your money. But it’s important to consider your needs carefully before you choose. The best account for your neighbor, sister or friend could be completely wrong for you.

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]]> http://thefamilywallet.com/2009/07/top-savings-accounts-for-your-nest-eggs.html/feed Your Family Records Organizer (CD-Rom) http://thefamilywallet.com/2009/07/your-family-records-organizer-cd-rom.html http://thefamilywallet.com/2009/07/your-family-records-organizer-cd-rom.html#comments Mon, 13 Jul 2009 22:14:59 +0000 D.J. http://thefamilywallet.com/2009/07/your-family-records-organizer-cd-rom.html The “Family Records Organizer” is a great way to get important information organized and into one easy-to-get-to place. This CD-ROM is easy to use and runs on both PC and Mac systems.

The CD-Rom consists of various forms that can be filled out and saved on your computer or printed on paper. Financial information and contact information forms are only two examples of the available forms.

The other forms allow you to stay on top of cash assets, emergency instructions, employment information, kids’ information, pets, real estate records, self-employment/home business information, funeral arrangements, family memorabilia, financial data and more. These forms can easily be updated if information changes.

Each form also comes with advice and suggestions from the editors of Kiplinger’s Personal Finance magazine.

This CD-ROM is fantastic if you want to get your important personal information organized in one place, so that family members can access the information quickly in case of emergency. Once you have this system working for you, you can say good bye to digging for papers.

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]]> http://thefamilywallet.com/2009/07/your-family-records-organizer-cd-rom.html/feed Lost or Stolen Credit Card? http://thefamilywallet.com/2009/07/lost-or-stolen-credit-card.html http://thefamilywallet.com/2009/07/lost-or-stolen-credit-card.html#comments Mon, 13 Jul 2009 10:18:04 +0000 D.J. http://thefamilywallet.com/2009/07/lost-or-stolen-credit-card.html When it comes to finances, few things are as unnerving as losing a credit card or having it stolen. By the time you realize it’s gone, someone could be living the good life and charging it to you. But by taking action quickly, you can avoid most, if not all, liability for unauthorized charges.

When their cards go missing, cardholders are protected by the Fair Credit Billing Act (FCBA). This law mandates that as long as you report your card missing or stolen in a timely manner, you can be held liable for no more than $50 in unauthorized charges. And if you report it before the card is used, you can’t be held responsible for any charges made.

If you find that one or more of your cards are missing, here’s what you need to do:

1. Report the missing card to the issuer immediately. If you don’t know the phone number to call, it should be printed on your credit card statements. Reporting the theft or loss as quickly as possible is crucial, so it’s best to keep a list of your card numbers and the fraud reporting phone numbers in a safe place for easy access.

2. Write a letter to each credit card issuer summarizing the details of your phone conversation. Include your name, card number, when you noticed your card missing and when you reported it. Also include the name of the representative you spoke to. Make a copy for your records, and send the letter via certified mail or with a return receipt request.

3. Keep a close eye on your credit card statements for several months. If you notice any charges you didn’t make, contact the issuer immediately. You should not have to pay any charges made if you have already reported your card lost or stolen.

Minimizing Your Risk

Anyone can have his credit card stolen. But there are a few things you can do to minimize your risk. These include:

* Leave your credit cards at home when you don’t plan to use them. You’re much more likely to have them stolen from your wallet or purse than from your home, especially if you keep them locked up.

* Do not carry your PIN number with you. If you do, a thief can easily use your card to obtain cash advances.

* Carefully check your credit card statements as soon as you receive them. Thieves do not have to have the actual card to make charges to your account. They can often make purchases online, by phone or by mail with only your name, card number and expiration date. These can be obtained by stealing records from stores you’ve done business with in the past.

* Be careful when using your credit card. Only buy online from websites you trust, and be aware of suspicious activity when using your card in person. Thieves have been known to snap pictures of credit cards with cell phone cameras and use devices to read cards as they are swiped.

No matter how careful we are, having our credit card or card number stolen is a possibility. By keeping an eye on account activity and taking action quickly if a card is lost or stolen, you can prevent a thief from benefiting from his crime and avoid having to foot the bill.

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]]> http://thefamilywallet.com/2009/07/lost-or-stolen-credit-card.html/feed Splurging Is Okay Sometimes http://thefamilywallet.com/2009/07/splurging-is-okay-sometimes.html http://thefamilywallet.com/2009/07/splurging-is-okay-sometimes.html#comments Sun, 12 Jul 2009 10:26:59 +0000 D.J. http://thefamilywallet.com/2009/07/splurging-is-okay-sometimes.html Being frugal has lots of benefits. It can help us save up money for emergencies and retirement. When we lose a source of income, it can help us survive until it is replaced. And it allows us to get more for our money. The biggest drawback is that sometimes it’s not very much fun.

Even though we know we don’t need it, it can be disheartening to see that stylish jacket or great laptop that we’ve been dreaming about and know it’s not practical to buy it. We may feel deprived when we see friends and co-workers going out to dinner at fancy restaurants and buying the things they want. Yet in the interest of frugality, we resist the urge to emulate them.

But when frugality becomes a drag, it can lead to poor morale. And that can lead to impulsive spending on small items as a way to make us feel better. Those small items add up, putting a strain on the budget. Wouldn’t it make more sense to splurge every once in a while?

Hardcore frugalists cringe at the thought of splurging, but there’s nothing wrong with it as long as we do so within our means. That means instead of spending money that is intended for bill paying or using a credit card, we pay for the splurge with our discretionary income. This way we avoid putting ourselves in a bind and prevent budget burnout.

Splurges come in many shapes and sizes. Those who love fashion might splurge on that unique designer dress in the boutique window. Families with young children might splurge on a trip to an amusement park. Gamers might splurge on that new gaming system that everyone has been raving about. As long as it’s something you will truly enjoy and springing for it won’t adversely affect your finances, there’s nothing wrong with it.

That’s not to say that we should make a habit of splurging. If we do, we miss the opportunity to put money to wiser use. Instead of buying a new pair of shoes every month, even if you can afford to do so, make it every four to six months. Put the money you save into your emergency fund, toward the kids’ college education or in a retirement fund.

Oversplurging will also make each splurge less meaningful. It is thrilling to get something that you want, but when you buy everything you fancy, the thrill fades away. And when it comes to material things, you probably won’t use half of what you buy. Instead of throwing money away on something that will end up in the back of the closet, save it up for something more practical.

When we diet, it’s hard to stick with it because we feel deprived. An occasional splurge can help keep us on track, as long as it’s done in moderation. The same is true when it comes to money. By giving in to our desires on occasion without going overboard, we can feel better about being frugal and keep up the good work.

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]]> http://thefamilywallet.com/2009/07/splurging-is-okay-sometimes.html/feed How Small Amounts Matter http://thefamilywallet.com/2009/07/how-small-amounts-matter.html http://thefamilywallet.com/2009/07/how-small-amounts-matter.html#comments Sat, 11 Jul 2009 10:11:41 +0000 D.J. http://thefamilywallet.com/2009/07/how-small-amounts-matter.html We’ve all heard the expression “pinching pennies.” Perhaps we’ve even laughed at it. But as insignificant as pennies may seem, a penny here and a penny there adds up. If you save up enough pennies, before long you’ll be counting your money in dollars.

Whether you’re facing a drop in income or trying to save up some money, it’s important not to forget the little things. In fact, they may be the best place to start when it comes to trimming the budget. Small expenses are less likely to be missed than larger ones, and most individuals and families have lots of them. A cup of cappuccino here and a video rental there won’t make a big difference in our lives either way, but combined with other small expenses, they can make a big difference in our budgets.

Here’s an example. Let’s say you grab a biscuit and juice or coffee at your favorite fast food place every morning for breakfast on the way to work. It costs you $3 a day. That doesn’t seem like much. But if you were to eat breakfast at home, you could eat for about 50 cents each morning. In a week’s time, you would save $12.50. In a month’s time, you’d save $50. And over the course of a year, you would save a whopping $600!

If you can save that much just by cutting one minor expense, imagine how much you could save by eliminating a few more. If you switched to a cell phone plan that’s $10 cheaper, you could save $120 a year. If you buy a bottled water to take to the gym three days a week for $1.50 a pop, you could save $234 a year by bringing water from home. Just those three minor adjustments could save you a grand total of nearly $1,000 a year!

Conserving energy can also save you money while causing little or no inconvenience. For example, maybe you split your errands over two days each week. Making one trip out and running them all at one time could cut your transportation costs for that activity in half. Simple habits such as turning the lights off when you leave a room and turning the thermostat down a few degrees in the winter and up a few in the summer can also make a difference. Actual savings on these things will vary, but they add up just like anything else.

Small expenses end up costing us more than we realize. By making minor changes in the way we do things and cutting out unnecessary items, we can have more wiggle room in our budgets. This can enable us to start an emergency or retirement fund, save up for a family vacation, or buy that new appliance we’ve needed for so long.

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]]> http://thefamilywallet.com/2009/07/how-small-amounts-matter.html/feed How Much Money Should I Set Aside for Emergencies? http://thefamilywallet.com/2009/07/how-much-money-should-i-set-aside-for-emergencies.html http://thefamilywallet.com/2009/07/how-much-money-should-i-set-aside-for-emergencies.html#comments Fri, 10 Jul 2009 10:14:26 +0000 D.J. http://thefamilywallet.com/2009/07/how-much-money-should-i-set-aside-for-emergencies.html No matter who you are, an emergency of some kind will affect you at some point in your life. Unfortunately, few people are prepared when disaster strikes. And that’s especially true when it comes to financial emergencies.

Financial emergencies come in all shapes and sizes. Job loss is a big (and increasingly common) one, as is disability. The need for car repairs is not as devastating, but if you count on your car to get back and forth to work, it’s something that must be taken care of immediately. Even the death of a major appliance can strike a severe blow if you don’t have an emergency fund.

We all know that it’s smart to have some money socked away for a rainy day. But we don’t all make an effort to do so. A common reason given for lack of an emergency fund is that one can’t afford to save money. But if you think about it, you really can’t afford not to. If something were to happen and you didn’t have any money to take care of it, your only alternative would be to use credit. And that’s not always an option.

Finding money to put toward an emergency fund is not as difficult as most people think. If you eliminate unnecessary expenses from your budget, you should be able to find at least a little money to set aside each month. Even if it’s just $10, it’s a start. But how much should one aim to accumulate in an emergency fund?

Experts have differing opinions on how large an emergency fund should be. Some say you should have three to six months’ salary. Others say enough to cover your minimum expenses for three to six months. And still others argue that you should not work on an emergency fund until you’ve paid off any credit card debt you have.

The truth is, there’s no one-size-fits-all answer. How much you need in an emergency fund depends on a number of factors. If you’re single and in a high-demand profession, you might be able to get by with less than a family man in a less dependable occupation. If you’re self-employed, you may need more than most people because you won’t be able to fall back on unemployment if you run low on work. If you’re retired, you might need more than someone who’s still in the workforce. And if you don’t have adequate health and disability insurance, it’s very important to have a large financial cushion.

Still, the guidelines provided by financial gurus are helpful. It is certainly a good idea to have at least enough money put away to cover necessities and minimum payments on bills for a few months. And if you have accumulated a large amount of high-interest debt, it might be wise to save up $1,000 or so and then work on paying off your balances before continuing.

No matter how much money you make, having an emergency fund is essential. Even if it’s only a month’s salary, it will help prevent small emergencies from striking a crushing blow to your finances. And it’s okay if building up an adequate fund takes a while. With each little bit you put away, you become a little more financially secure.

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Tags: financial emergencies, emergency fund, minimum expenses, credit card debt, disaster strikes


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