Four Habits that Promote Financial Well-being – Part Two

This article is the second in our series about the habits of people who have reached financial well-being. If you have not read it, be sure to read the first article.
It’s probably not a coincidence that several Facebook friends have recently posted links to articles about the plight of the working poor. The cost of living has continued to rise for everyone, but those with the lowest income seem to be hit the hardest. Living paycheck to paycheck is terribly stressful. One emergency can put you into debt or mean that important bills, such as utilities, don’t get paid.
The answer, of course, is to have a savings account to cover those types of emergencies. In the ideal situation, when your car breaks down or your child needs to go to the emergency room, you could reach into your emergency savings account and pay the unexpected bill. However, having an emergency savings fund is much easier said than done. It’s easy to become overwhelmed when you don’t seem to have any extra money after paying for necessities. How can you save? There are some creative answers that may be of help to get your savings jump started:

• It’s often ideal to buy in bulk, but what if your weekly or monthly budget just doesn’t have enough money to cover that Super-Size package? Just do what you can. Can you afford an extra few cans of food while they’re on sale? Buying them now at $1 a can rather than the regular $2 will save in the future. Having a financial cushion doesn’t always need to mean you have lots of cash. Having shelf-stable food products on hand are another form of preparing for the upcoming days and months.
• When you buy, look for the best deals. For example, the prices at most gas stations go up and down in a cycle. As you drive home from work, make note of prices so that you can get the best deal. Your gas tank may not be on empty yet, but if you have $5 to get a gallon and a half now, it will save you more than if you have to spend that same $5 for just over a gallon during weekend prices. Just like with food, having gas in the car is a form of financial cushion, letting you “ride out” (no pun intended) any short-term spikes in gas cost, such as over a holiday weekend.
• Do you have items you could sell to create a quick savings account? If you have a storage unit or gently used clothes a child has outgrown, you probably have a source of things to sell. If you’re able to sell enough stuff from the storage unit, you may be able to eliminate the storage unit’s monthly cost entirely. The extra money could go into your emergency savings account.

As you begin to get the hang of saving and have set aside at least a few hundred dollars for emergencies, you can begin to think more broadly. Can you begin to set aside for other seasonal costs like Christmas and birthdays, tax payments on your home, or retirement? Having a savings cushion not only frees you from having to take out high-interest debt when an emergency happens (credit cards and payday loans), it gives you peace of mind to know that you can financially make it through whatever tomorrow (and next week and next year) brings.
Realize that you’re making strides toward a life-long goal – the change from living paycheck to paycheck doesn’t happen in a day. However, the first step can happen today.
If you have questions about managing your personal finances or need help getting started with saving or managing debt, call Apprisen at 800-355-2227 or visit us online. We are here to help you.