Let’s start off the new year with a bang, shall we?
First, we need to establish a fund for when life happens. Some call this a Murphy Fund (cuz we are human and we often break things), or a contingency fund. It is Milestone Numeral Uno.
I have found three ways to pump this fund up.
Cut back your spending. Nothing saves you money quicker than by not spending it. Probably the hardest thing next to defying the law of gravity in my opinion. But it’s the quickest. Even if you eliminate the daily coffee shop run, you could save up to $35.00 dollars a week.
Automatic deposits from your paycheck is another way to build up your savings. Say we take the $35.00 dollars we could have saved by stepping back our spending. Times it by two for $70 dollars per pay period (say you are paid bi-monthly. Get with your payroll department and set up a deposit to go directly to your savings. Boom! $140 dollars saved in just a month.
They have an app for that! It is called Digit. Per their website, Digit analyzes your spending and automatically saves the perfect amount every day, so you don’t have to think about it. I was able to save $100 dollars in less than fifteen days using this app. (I’m not affiliated so it costs you nothing to check out). As of this posting, I am half way to my goal of $1000 dollars. I intend to increase it by one hundred a month.
Once this is fully funded, it will sit and behave until life happens. If it becomes depleted…we just start again. Remember, this account should only be used for emergencies such as a deductible or bail money. It’s not for purchasing a pair of shoes (much to my dismay) that are on sale.
I would love to learn any tips or tricks you have for building a safety fund. Did you have a side hustle? Let me know in the comments below!