What is an emergency fund?
An emergency fund is a cash reserve that you keep in a safe place and use only for any unexpected financial emergencies. It can be a separate account, such as checking or savings accounts so you could have a quick access in emergency situations.
The purpose of the fund is to improve financial security by creating a safety net of funds that can be used to meet emergency expenses as well as reduce the need to use high interest debt, such as payday loan, cash advances, and credit cards, as last resorts.
It might be hard for some people to create an emergency fund especially if they have a tight budget. But the truth is, it’s not that hard to save for this fund. Here are some tips on how you can start creating an emergency fund:
1. Start small. Maybe you can start at $50 a month. A little goes a long way especially when it comes to savings. Just start. It will slowly grow and you will be glad to see at least a little in your savings, and will soon be motivate to try to save more.
2. Spend less. Focus on basic needs not wants. Don’t buy unnecessary things. You have to spend less in order to save money. Instead of subscribing for a monthly issue of magazine, why not save it and put it in your emergency fund? Cut out your luxuries and just save the allotted amount for your future needs.
3. Set up automatic deposits. Make saving easy by scheduling automatic deposits to your emergency fund. You can set up an online savings account that would automatically deduct an amount every payday.
4. Prioritize your emergency fund. Treat your fund as one of the regular bills you’ve got to pay, an obligation you have to fulfill. Set a due date for it, such as your payday, so you will not forget to “pay” your fund.
5. Make extra income. Take your skills and market them as a freelancer, or get a second job on the side. You can also start a small business at home. Take the extra income and bank it. This is one of my strategies, and it works great.
6. Set a time frame to complete the fund. You can set a possible time frame to reach you goal – for example, to finish your emergency fund in a year. That will be possible if you will believe in yourself.
7. Sell some stuff. Make use of eBay, Craigslist, or other classifieds services to sell things of value around your house. Is that DVD collection you never watch really more important that your financial security?
With a little effort, you can start saving and prepare not just yourself, but your entire family for future emergency situations.
Family Vacations on a Budget
Family vacations are sometimes hard to schedule because it requires a big budget. Most of the time, we parents, set aside money for more important things like education, foods, bills, etc rather than saving for a vacation. But there are family vacation ideas that are in a budget and at the same time, be enjoyable for your family as well.
Why not organize a vacation in your relative’s place for a couple of days? This idea is really inexpensive for you don’t have to make hotel accommodations anymore. You just have to make sure that you get along well with these relatives, and of course, they allow you to stay with them. This idea could even tighten your relationship with them.
Another suggestion is a camping vacation. This includes hiking as well. This could be a lot of fun for your kids especially if they love nature. Camping is always one of the best ideas for its cheap but very educational for it builds self reliance, confidence, and boost your child’s self esteem. This idea doesn’t require a high budget because all you will need is a tent. Again, you could just save the hotel fee and allot it for your food budget instead.
Vacation doesn’t necessarily mean that you have to go to other place away from your home. You can simply have a vacation just by staying home for a week with your family. Take this chance as a bonding time with them. You can simply watch in your home theater with your kids while eating homemade pop corn and pizza. Take this time to teach your kids your very own recipe. Also, don’t forget the board games and hide and seek. You can also play backyard table tennis or simply jump to the pool if you got one.
There are a lot of ideas you could consider to take your family for a vacation, just be creative and use your imagination. Also, don’t forget to ask for your family member’s ideas as well. They might have the best possible way to spend your vacation in a budget.
9 Steps to Save Money on Groceries
Not everyone wants to be a grocery guru or coupon queen. The following list will help you save money on your grocery bill without cutting coupons and watching for the latest & greatest sale prices. While this works and it is a great way to save money, not everyone has the time or interest. This article will show you ways you can make the best use of resources so you are not wasting food, and how to cut down on trips to the grocery store.
- Start by making a list of dishes you like to eat. Think back on what you have eaten the past couple of month, or meals that you really like that you haven’t had in a while.
- For each meal, make a list of ingredients you will need to make the meal.
- For each ingredient, put a number between 1-4 representing how long the ingredient generally lasts. For example, if the menu calls for fresh vegetables, put a one next to the vegetables. If the menu item is something like spaghetti, noodles and spaghetti sauce can store much longer so you can put a 4 next to these ingredients. Based on the numbers in your ingredients, use the lowest number and write that next to your meal. This number will help in planning later.
- Determine how often you want to go to the store. This will vary by family. Some families can manage to go to the store once per month. Others go every other day. It will depend on your circumstances. For example, if your family goes through 4 gallons of milk in a week, and that is all the milk you can store in your refrigerator, you will need to go each week. I would guess that most families can get by going to the store every two weeks. The less trips you plan to make, the less likely you are to overspend.
- Raid the fridge. Go through items you currently have. Make note of items that may go bad or expire soon so you can be sure to use them in your meal plans.
- Plan your meals. Print out a blank calendar. CalendarsThatWork.com has many calendars you can print out for free. Using your list of meals and make a plan for the time period you have specified in the previous step. So, if you have planned to go to the grocery store every two weeks, plan two weeks worth of meals. Us the numbers from step 3 above to help you plan. So, if you have a meal that contains ingredients that go bad after only one week, put that meal in the first week of your plan.
- Create your shopping list. Using your meal plan, determine the ingredients you are lacking in order to make each meal. Get the adequate amount of ingredients for each meal.
- Buy your groceries.
- Stick to the plan! You may not feel like eating something you have planned. If this is the case, try swapping out meal days. Avoid the temptation to eat out. If you want to eat out, put that in your meal planning before you go shopping.
Other useful tips:
- Never go shopping on an empty stomach. This is when you will tend to splurge. Eat a hearty meal before doing your grocery shopping.
- Stay within a budget. Set a limit on how much you want to spend on food each grocery trip. Plan you meals according to the amount you have budgeted to spend. Put a set amount of cash in an envelope each pay-check you get in order to prevent overspending on your groceries. You may also make use of envelope budgeting software for more convenience.
- Buy non-perishables in bulk. As you continue to follow this plan, you will find some meals are cheaper than others. If you eat a particular meal on a regular basis, you may find it cheaper to buy the non-perishable ingredients in bulk.
Remember, when you fail to plan, you plan to fail. A little bit of planning ahead of time can stretch your dollar a great deal and help you save money on groceries and eliminating the need to through out expired food.
Budgeting with your spouse
The wife bought a $100 watch for a special occasion, not knowing that her husband intended same $100 for the electric bill. Start of an argument.
The husband brings home an apple laptop that he purchased for $1500 and finds out that his child was admitted to the hospital and they need the same amount for the hospital bill. Another argument.
It is always advised that married couples should discuss their budget before getting married to have the same set of goals that they will be working towards. However there are times when the two of you might not be in agreement when it comes to your finances. You need to work to resolve these differences quickly.
Here are steps you should take when budgeting with your spouse:
1. Calculate your monthly net income first. Include take-home pay for each spouse, along with any additional income.
2. Compute all your shared monthly expenses. Include rent/mortgage, utilities, car payments, car maintenance, insurance, average monthly grocery expenses, and so on.
Bear in mind that your total monthly expenses should be less than your monthly net income, if it’s not, then you have to think of possible ways you can trim your monthly expenses to make ends meet. How can you increase your income through a second job, freelance or other legal means?
3. Allocate a reasonable monthly allowance for each spouse. This includes daily expenses for meals, snack, transportation allowance, salon, gasoline, car maintenance, etc. Be sure to include money that you each can spend on what you want each month that is for you to spend however you see fit like a new pair of shoes, etc.
Make sure that the combined allowances and monthly expenses is less than the net monthly income. If not, then again, think of possible ways you can trim your monthly expenses to make ends meet.
4. Decide what to do with the “remaining money”. Cover your options and determine the best ways to allocate your remaining money. For example you may want to put some amount for the emergency fund, start saving for a new house, etc.
5. Agree on who will manage the bills. It is recommended that the one who is better in computation/ math be the one to do this. The task includes checking bank accounts if there is enough money left, paying the bills, allotting money for the monthly expenses, etc.
If you and your wife have financial issues take time to talk. Sit down and have a discussion with your spouse where you simply listen to her concerns about the budget. Set your goals together. Some people are not planners, but once they realize that the budget will help them reach their goals they are more willing to work on a budget. Remember, open communication is the secret in a happy and a smooth-sailing relationship.
Noel A. Dalalo is the Marketing Specialist of Inzolo.
Inzolo.com helps you budget your money and bring you peace and tranquility as it relates to your financial life.
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