Saving for the emergency is very essential. It provides you with the financial resources and secures your financial needs. One can depend on this saving at the time of emergency like to pay hospital bills if one is sick or doctor fees or to make any emergency repair of the car or home.
If you have not saved for the emergency time it is more likely that you may borrow money or take debt from the credit cards, doing so will cost you more as you have to bear interest on it.
It will not harm you if you put $30 or $50 every month in an emergency saving account. Rather it will help you in securing your future emergency needs. You should consider the emergency funds as the additional bills that have to be paid every month in any case.
It is very necessary to maintain the emergency saving account if you want to make the financial assurance for the future. The aim is to save the money from your income and it should be almost equal to the three months living expenditures. This will help you in securing the future emergency requirement.
The only key is to save money continuously for the emergency purpose and only spend it in the case of real emergency.
The purpose of emergency savings is different from that of investment. The purpose is to get easy access on the money in the difficult time rather than to earn more interest on the investment made. The saving made must also be risk free and secured amount.
In spite of thinking about your financial status, the need is to analysis your monthly expenses. If you know that where are you presently spending and what are you current earning, you will be able to decide that where you can cut down the expenses. It will become easier to save money for the emergency purpose. This practice is known as budgeting.
Budgeting is to save money for the predictable and unpredictable future needs. The goal of budgeting is to save money for emergency purpose.
For saving for emergency one can open the saving, checking or money market accounts and also secure money in certificates of deposits CD. From these you can make easy withdrawal of your money.
You can place your money in the saving accounts for meeting the two goals at the same time. One to save money for fulfilling the future need and other is for the time of emergency. The best way is to keep the money for both purposes in fifty fifty ratio or you can either choose to open two different accounts for different purpose. The choice is yours.
Budget Tips In Familial Ties
It is always be the problem for the budget marker to execute it as efficiently as it was made. But usually the execution is quite different than the planning. The person who makes the budget always beg the other family members to support him/ her in implementing the budget plan as it was made.
Developing the budget vision in the family is very essential if you want the successful implementation of the budget plans.
Talk with your family that what are the budget limitations and in which limits you have to fulfill all the demands of family and even save for the time of emergency (like hospital dues, college fund etc).
If you will be able to make your family realize the budget constraints, they will surely change their perspective and you in that case will surely be able to achieve your budget goals. But make sure that not a single member of your family counteracts your budget shrinking plan because in that case all can be ruin.
Another way to save the money is to make the list of expenses of individual member. In this way you will be able to dig out that what are the major expenses and which expenses can be cut off.
This will show that how much each member is contributing towards saving the amount and in making the better utilization of the available financial resources.
If you have demanding kids which keep on asking for the money again and again, you can develop the habit of saving in them from childhood by giving them limited weekly allowance and ask them to meet their requirements from this limited budget and also save from it for future purchases of toys or bags etc.
You can again cut down the expenses if you break down your monthly budget even in weekly. Keep that part of money aside which you required to use in a week. This budget limitation will not let you exceed your expenses since the first week and manage it till the end of the month.
Another way is to keep an eye on your eating habits. Because most of the families spend too much in dinning out, so to make sure that you are not spending too much in outside eating.
Also keep an eye on the home made cooking expenses. Do not spend too much in eating unnecessary items. Also cut down the monthly expenses done on buying the newspaper. Do read newspaper online and save that amount in piggy bank, by doing this you will see the alarming results in the end of the year.
You can also cut down your gasoline and traveling expenses if you properly plan your day. See which activities can be done on one trip and group them if they are in the same area. This will save the cost and ultimately enhance the amount of saving.
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