4 Secret Techniques to Improve Your Emergency Fund
Emergency funds can be a saving grace in desperate times; whether it’s a medical emergency, natural disaster, or some other unforeseen expense, emergency funds can be a key factor in keeping you out of tremendous debt.
Basic tips such as cutting back expenses and putting away extra money are no secret, but here are four tips which many do not think about which can greatly increase the amount of savings you have in your emergency fund.
1. Save Your Tax Return
If you’ve survived all year without the extra money; you can continue to survive without it. Many think of their tax return as a second bonus and already have items which they know they will spend it on or view it as a way to pay off their holiday debts. Depositing your tax refund directly into your emergency fund can automatically boost it a few hundred to even one thousand dollars.
2. Sell Unused Items
Things such as old exercise equipment, toys, video games, shoes, etc. have more value being sold than sitting in your house. You can sell these items online or have a yard sale, but either way that is money you can put directly into your emergency fund. It would also be a good idea to look into selling old electronic devices such as computers and video game consoles at stores which buy these products, you may get more money this way than selling the online or at a yard sale. Either way, it is extra money into your emergency fund which you never had in the first place, so you won’t miss it or feel the need to dip into it.
3. Open an Account Which Gains Interest
If you’re locking your funds away, at least make some more money off of it instead of just having it sit in the bank. Look into opening accounts which offer a good interest rate in order to help them grow. This will allow your money to accumulate even when you are not actively putting in savings. Your emergency fund can continue to grow this way, even if you cannot actively afford to put money into it. It is important to avoid dipping into this fund as much as possible, otherwise, it will hinder the account from growing.
4. Request a Rate Reduction on Your Credit Cards
If you are in good standing with your creditors but still have a balance, reducing your interest rate can save a large amount of money each month. You can call your provider and see if they will lower your rates. Having a healthy credit history and making timely payments can work in your favor while negotiating. Lower interest rates will save you extra money each month in which you could put directly into your emergency fund. Whatever you do, it is important to fully understand the terms of your new arrangement in order to prevent yourself from accumulating more debt in the long-run.
Building an emergency fund is no easy feat. It should always remain separate from your standard savings account which many people do not realize. If you need advice on building your emergency fund or want more ways to start saving, leave a comment below or give us a call today!