A savings fund is your best defense against forces that seek to derail your debt free momentum. Yes! Forces intent on keeping you mired in money mishaps, floundering in financial fiascoes, or let’s face it – deep in debt are real.
Alliterative exercises aside, a savings fund is a must have. It’s just not always an easy must do.
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Before tackling a debt repayment plan, set up a Mad Money Fund. This fund should contain at least $1000 (depending on your comfort level). Some balk at the low figure, but consider your recent emergencies.
Would $1000 have been sufficient? Don’t dread using the cushion in a genuine emergency. The Mad Money Fund exists so you avoid the madness when emergencies happen.
- Start your budget. The quickest way to give yourself a raise is to tell your money where to go. You do that with a budget.
- Setup auto saving. Redirect money to your savings using automatic tools. You don’t miss what you don’t see.
- Sell everything. What are you hoarding that can be converted into cash? Ebay. Craig’s List. Garage Sale. Clean house and build your savings.
- Stash windfalls. Do you have a lump sum coming? Instead of spending before you receive, plan on using that to pad your savings.
- Seek extra income. Do you have a marketable service? Hire yourself out. Secure part-time income and save up. Review job boards like FlexJobs.com. They offer a variety of employment opportunities with flexible hours and/or location requirements.
Trying to pay off debt without a savings stash is like filling a leaky bucket. Eventually, frustration may cause you to give up completely. The Mad Money Fund will help you avoid using credit so emergencies don’t derail your debt repayment plans.
Do you have other simple savings strategies to share?