A simple fact and integral facet of modern capitalism is that most people are going to be living paycheck to paycheck. While this is definitely a facet of capitalism and it’s construction, there are ways that you can get around it and protect your family in the face of an emergency. Being prepared is how you survive an emergency and it’s important to concentrate on the ways in which you can improve your situation so that you can help your family and grow when needed. When you live paycheck to paycheck, any unsuspecting costs can set you back on rent or mortgage, car payments and groceries and can actually destroy the foundation of which you’ve built your life upon. This is important to remember because building up an emergency savings, while relatively easy, does take some willpower. Here are a few steps you can take to make an emergency savings that is vital to your families survival.
The first thing you should do when you’re looking to build an emergency savings account is to build a budget. Although budgeting sounds difficult at first, it’s actually relatively easy once you know what you spend and where. Having an online bank account makes understanding your spending habits much easier. The only thing you have to do when it comes to the first part of building a budget is organizing your spending and understanding where your money is going every month. There are actually applications out there that are free or cost very little that can help you with this, and it’s a great way to make sure that you have everything in the right categories.
The main four categories in your budget should be groceries, recurring life expenses, entertainment, and other. These four categories are a great way to make sure that you have everything organized. Food, while obvious, is your grocery bill. It’s important to outline the difference here in the difference between good that you make at home and use up every month, and money that you put towards going out to eat. Going out to eat is incredibly expensive and it’s important that you understand how this is actually in the other, of entertainment category because it is not a necessity. Recurring life expenses will be your monthly life expenses like your car payment, your rent, your mortgage, your utilities, trash, phone bills, and more. This should be the most costly expense in your budget, especially if you’re trying to save money. Entertainment is also obvious and it’s important that this is the lowest percentages of your monthly spending ding budget. The fifth, and what we are talking about here today is the emergency budget. This should be everything left over from your former budget, as well as what is left if you have money left over from your other budgets. When you make these budgets it’s important to remember that the money should be tight, or you’re not doing it right.
You may find it difficult to save money from time to time on these items if you have issues like replacing clothing and other things. If you do replace clothing, make sure it’s cheap for children but well made for adults. Children usually don’t get the chance to wear out their clothing with use because they grow out of them. So inexpensive clothing is a great option. However, adults should focus on quality like True Religion where you know that they’ll last.