Everywhere and Nowhere
Before you decide where to invest your emergency fund, discover ways to build it. The most lucrative options require a minimum deposit to return the highest yield on your money. Start by saving the minimum deposit.
Ye Olde Penny Jar
Start with a dollar. If you only spend bills from your wallet, your savings will add up quickly.
At the end of everyday, remove the coins from your pocket or change purse to place in a jar, piggy bank or decorative bottle. This money becomes off limits once it goes in the “bank”. Think about this:
Morning coffee: $3.26…Savings: 74 cents
Newspaper: $0.50…Savings: 50 cents
Lunch: $8.09…Savings: 91 cents
Snack and drink on the ride home: $2.84…Savings: 16 cents
Before dinner, you have saved $2.31. If you do this everyday, the year end jar total will be $565.95. And that is if you don’t save on the weekends!
What do you do on weekends? Accelerate your savings by rounding to the nearest $5. Just like weekday spending of singles, do not hand a clerk a bill smaller than $5.
Dinner with spouse: $46.78…Savings: $3.22
Movies for two: $16.00…Savings: $4.00
Popcorn, JuJu Bees & drinks: $12.00…Savings $3.00
In one outing, you have saved $10.22. One outing per week translates to more than $520 per year.
Drop the change in the weekday penny jar. Whether you put the bills in a firebox, an old wallet, your Bible or an empty check box, your emergency fund is growing. In these two examples, you have already saved more than $1,000.
Next, we will look at debit and credit cards and monthly bills.
See all posts in the Emergency Funds Series.