How to Save Money when You Are Poor for an Emergency Fund

With the economic downfall, it is becoming more and more difficult for people to save money. You have already budgeted your money, clipped your coupons, stopped eating out, and turned up the air conditioning. Yet, somehow, the extra money that you have never makes it to the bank (if you have one). What next?

If you do not have an emergency fund, you should start creating one. In case of need of a car repair or health issues, an emergency fund is a cushion so that you will not be in financial trouble if an emergency occurs. By having an emergency fund, it prevents having to resort to credit cards when a problem occurs. Here are three tips to help you build your emergency fund.

There are many ways for people to save their money. First, you should make a goal to save $100, then $500, then $1000, and make small increments until you have at least $10,000 (which will cover most large emergencies, such as a few nights in the emergency room).

First, create a savings account that is not tied to a debit account or an account that you hold your regular spending money. Label it as an emergency fund. Look around, and try to find ones with the best interest rates. You want a bank account because, with interest, you are making a small amount of money off of your money.

Second, every day you can throw all of your spare change into a jar. While saving your pennies does not seem like a way that much will add up, you would be surprised. According to Coinstar, the average eight ounce cup of coins will be $14.27, while the average gallon (or sixteen eight ounce cups) of coins will be $228.34. If you can save a full gallon of change, you are almost half way to the $500 savings goal.

Once you fill up your container, take the coins to the bank and deposit all of the coins into your account. Depending on your bank, you may have to roll the coins into wrappers before you can deposit them into a bank account. If you want to make saving easier when you have to wrap coins, have four containers: one holding pennies, one holding nickels, one holding dimes, and one holding quarters. It will save you time from having to separate your coins.

Third, pay yourself every day. It should only be a small amount; fifty cents to a dollar should be sufficient. If you have another account, most online banking sites will let you transfer money over to another account on a regular basis, without any more work than set up. If you put fifty cents per day, you will make $182.50 that can go into your emergency fund. A dollar a day will be $365. I set up my bank account so it will transfer $7 a week, every Sunday. If you can set it up to pay you every day, then you can forget about it as your emergency fund grows. If you want to save more, and can afford it, give yourself a small raise.

These are three tips to help you start building your emergency fund. Saving even a small amount can help with saving. It is important to remember that this is an emergency fund, and it should only be used as such accordingly.