Setting up an emergency fund

As we moved through life, many of us set up or thought about setting up an emergency fund to look after any serious financial setbacks that might occur. As Boomers, we went through a number of recessions, high interest and other obstacles, and as we retire we still have to be cautious of our spending and savings.

I think that most of us at one time or another has been hit with a serious money crisis and we find yourself scrambling around for emergency money. Here are some ideas on how to assess your situation and get back on your feet.

If you have a money problem or a financial setback you can be sure that there may also be a crippling emotional setback. Whenever a money emergency hits, it will be your ability to deal with the individual pitfalls that will be useful. We know that stress will tend to accumulate and make your life much more difficult to cope.  

Being Calm is the First Key to Managing a Money Emergency. You will not be so overwhelmed when you can calmly and rationally look at each individual problem as it arises. Staying calm must take center stage. You must NEVER allow yourself the luxury of panic. There is no one there for you to just take over. You are all you have.

The more you panic, the less effective you will be. You need to keep a very clear head to be able to sit down and come up with an appropriate plan. It is only when you are at your most calm that you will be prepared to get to where you need to be and then overcome.

At even the first hint of a money emergency, it’s important not to act right away. If you do you will inevitably make a mistake! First, before you can manage your finances again, you have to first manage your emotions. You absolutely must regain your balance before you can even begin to plan.

If your money emergency demands that you act quickly, think first about seeking the advice of a debt counsellor, money coach or financial planner. Whenever possible think about seeking out the aid of a financially perceptive friend or family member who can help you to come to a clearer perspective.

Remember the old adage that “two heads are always better than just one!” You won’t need to make a major cash investment if you’re strapped. Look for a planner who will give you a one-hour consultation for $150. Often times this will be all you will need to securely turn the corner.

Before an emergency hits here are some everyday ways to save and set up an emergency fund. Some ways will require some sacrifice, while others will require little before thinking. The point is to be forever mindful of saving those pennies and before you know it, you will have saved up a tidy sum.

· Spend less money than you earn each week.

· Seek out a higher paying job.

· Keep your job skills sharp and up-to-date so that when a new opportunity comes up, you will be on your toes and first in line.

· If you must use credit cards/cut up those you can do without.

· If you must use credit cards, pay them all down in full each month.

· If you have credit card debt at high rates, consolidate at once.

· Lower your expenses, one by one.

· Forego purchasing non-essential items.

· Find cheaper insurance rates/then switch over.

· Use coupons to shop with.  Don’t purchase without a discount coupon.

· Wait for things to first go on sale before buying. Take advantage of catalogue saving certificates.

· Don’t buy an item just because it is on sale.

· Buy generic or non-name brand merchandise as much as possible.

· Wait for prices to fall to a discounted rate before buying (applies especially to electronics items).

· If you do eat out, buy gift certificates for half price meals.

· Do more stay in activities at home.

· Invest the money you save to earn even more.

· Create a plan to save $200 each month (or as much as you can manage.)  Never miss the monthly savings payment to yourself and try to find ways to increase it.

· Don’t spend money just because you have it.

· Find an interesting hobby to occupy your time and stop you from spending money.

· Find a hobby that you can turn into earnings.

· Go on a sensible diet and lose weight. You will save money on food, look and feel better, and your long-term health care costs should fall dramatically.

· Learn how to manage your finances by reading financial publications.

· Increase the amount of money you earn through a second job, promotion, new job, investments, etc.

· Paying down your debt is also a way to save money (it saves you from a debt payment and brings you closer to having money to invest).

· Switch to lower your telephone bill.

· Lower your cable bill by deleting pay channels or switch to a streaming service.

· Be patient when bargain shopping.

· Start saving money today! Don’t give up -- put just $10 aside, today!