How To Set Up A Quick & Easily Emergency Fund

A simple little plan to start your financial journey

How to avoid a little mistake before setting up your emergency fund.

Setting up an emergency fund is really a simple process, but before you get started there is something you need to do first. And that is to make up your mind and be serious about it. Decide what this emergency fund is for. Every money account you have should have a purpose to do something.

What is the purpose of your emergency fund? Could it be a plan for your mortgage or rent payments/ a quick trip out of town due to a family emergency or an order for a town evacuation/ auto repairs or an unexpected relative shows up at your door unannounced, you get the picture.

Making up you mind and being serious will give you purpose of why you need this set up.

How to create cash on demand to fund your account?

If you are serious about saving, then I am going to show you a few tips to get you going. All of this can be done within 30 days of course, there are many ways to save money but you may have a problem because you have so many options.

The first and foremost way is to save from your income. Decide how much you need to save for that emergency, for example: let say that your car has been acting up on you but the problem is not serious yet. But once that problem exposed itself, it will cost you in the neighborhood of $500 for repairs.

That is how much you need to plan for that emergency. So decide how much you can save a pay period or monthly to reach that goal. If saving from your income is not an option right now, try this for size.

Have a yard sell or use E-bay to sell unwanted items, try pawning items you no longer want, call your creditors and advise them you are experiencing unexpected circumstances and that you need to skip a payment without any penalty.

Try reducing some of your household expenses, challenge yourself to clip $100 in grocery coupons and use them on your next grocery trip and put the $100 savings in your emergency fund.

Try carpooling for a month, with the high cost of gas today you should do pretty very well. Start a pocket change jar and at the end of each day, just empty all your change there. If you do this for a year, you will be well surprise of what you have accumulated.

Where to park your emergency fund

This money is design to be liquid, in other words you have easy access to it, whenever you need it. I do not recommence Certificate of Deposit right now because it will tie up your money, if you cash out early there is a penalty for early withdraw. Stay way from Stock, Bond or any investment with risk or that will tie up your money.

This emergency fund need to be place in a high interest saving account without monthly fees. This account is not design to make you money or use later for investments. It is a emergency fund and only that, for you and your family.

You may open up a money market account, there are many good companies out there doing a fantastic job managing your money, however; these money market funds are not guaranteed by the FDIC. You may also check with your own bank.

How much to save

One problem savers have is knowing how much to save, this is one reason why they never get started. I am going to make it easy for you to set a goal so that you can get started now.

First determine what your total mortgage payment or rent payment are. Now multiply it by three months, okay take your auto payment if you have one and multiply it by three. Add everything up and that is your minimum target goal to start with.

Why did I select your house and auto payments? Well, you need a place to live and a car to drive to get back and forth to work. If you lost your job, this will help you buy some time until you find other employment, it also slows down a possible foreclosure / eviction or repossession. This method is a minimum to get you started and once you secure these funds, you can start on other needed household expenses.

The best time to set up an emergency fund

The best time is before there is a crisis, so lets put a few coals on the fire now and put together a back up plan so that you will be ready. Use the above example concerning your house and car to start.

Are you covered on your job for short and long term disability? or do you have a individual policy? If not, talk to a insurance agent about covering 60 to 70 percent of your income. Check with your current auto/homeowners carrier first. There may be a discount for multiplies policies.

Are you a member of Triple AAA Auto Club/Allstate or your gas card program? I have been a member of Triple AAA for 12 years and I do get my money’s worth. Look into these programs.

Do you have a friend or family member who works for the airline? Do they have buddy passes that are available to you? Check this out, it could save you hundreds of dollars.

Is your credit report coughing up blood? Fine, then instead of feeling sorry for it, let do something about it. How about repairing it, start repairing it now so that if and when you need it, you would have prepared yourself if a emergency arise.

A bad credit report will cause you to pay very high interest resulting in hundred of dollars in additional payments, if you are purchasing a house, car or other high ticket items.

If you are just getting by on your income, consider a part-time job until you reach your emergency fund goal or other projects. Make additional money by starting your own business, you know the one you been thinking about for the pass five years. Now is a good time to start.

Do not max out your credit cards, pay them down, put them in a secure place. This will be your emergency line of credit. Do not use your line of credit to  buy groceries, internet purchases, furniture or going out to eat. I suggest you take a class in money management if you have a problem in this area.

Remember, our only goal here is to established a emergency fund and put together a emergency back up plan.

You now have the fundamentals to get started, you can implement this program in less then 30 days. You are the only one holding you back.

I just share with you what you need to do first, what purpose for the emergency fund, where to park it, how much you need to get started and a back up plan. There you have it, make up your mind and get started now.

Copyright 2007 – Bobby Johnson – All Rights Reserved. You have my permission to published, broadcast or distributed this article as long as it’s not modify in any way.

Do You Make These 22 Mistakes With Your Personal Finances?

If you are worried about your financial future, you do have reasons to be concern. There are people in this world who put in over 20 years of working for someone else and cannot write a check for $5000 when they retire. You have been plague with high interest rates, consumer debt, credit cards, adjustable and interest only mortgage loans without any thoughts for the future.

I have outline 21 mistakes we make that is bringing disaster to our finances and our future. Look at the list below, if you fall into one of these situation, seek help now to fix it. Some of these mistake you can fix yourself, others you may need the help of a financial professional.

Mistake 1. Cash advances from your credit cards to pay bills and making just the minimum payment every month.

Mistake 2. Paying your bills after the due date, accumulating late fees. Your creditors loves you for this. It increases their yield.

Mistake 3. Refinancing your home to consolidate your debt just to find yourself back in debt again.

Mistake 4. Borrowing against your tax refund in the form of a (RAL) Rapid Refund Loan. This is highway robbery.

Mistake 5. Borrowing from your credit cards to pay another.

Mistake 6. You frequently borrow from friends and family, swearing you will pay them back and never do. You might be closing this door forever.

Mistake 7. You are one pay check away from being broke or homeless.

Mistake 8. Suffering from the something for nothing disease. You want to benefit without putting anything in.

Mistake 9. Taking disposals income spending it frivolously, playing the lottery or gambling, instead of investing it.

Mistake 10. Married couple working, both qualify to purchase more house, one lost a job or got sick, no savings and now both are facing foreclosure and contemplating bankruptcy.

Mistake 11. Not having a savings at all and writing bounce checks.

Mistake 12. Involved in get rich quick scheme. Giving money to investors without conducting a back ground check on the individual or company.

Mistake 13. Never establishing an emergency fund.

Mistake 14. You consolidate your bills into one payment and go out to apply for more credit.

Mistake 15. Not reviewing your credit report every six to twelve months.

Mistake 16. You frequently pawn your jewelry, DVD‘s, electronics, car title and use those payday advance loans.

Mistake 17.  Not having a financial plan or speaking to a financial advisor.

Mistake 18.  No tax planning to maximize tax deductions.

Mistake 19.  Not trying to increase your knowledge base to increase your wealth.

Mistake 20.  No life insurance planning or protection (life, health, auto, home and disability).

Mistake 21.  Not starting your business that you been thinking about for years.

Mistake 22. Having a negative attitude and being around negative people.

Now that I have outline these mistakes to you, make a plan within the next 30 days to see how you will correct them. Do not allow your personal finances to explode to a point that you could lose everything you have.

How You Can Quick and Easily Raise Your Credit Score by 150 Points

Use this simple technique to improve your credit rating fast

 

How would you like to give your credit rating a financial upgrade? Well, now you can. I am going to share with you a simple little strategy that will increase your credit score from 150 to 200 points. But first, let me tell you the mistakes you need to avoid before you get started.

If you been watching TV and saw a commercial selling cars, furniture or rent to own equipment telling you that you can re-build your credit by coming on down and sign up for their product, don’t do it that way. That is the most expensive way to re-build your credit, not to mention being tied into a two to four year agreement.

A quick way to rebuild your credit is by signing up for two to four credit card. These credit cards are design for people who currently have bad credit. They come with a credit limit between $300 to $500. That’s all you need to put this plan into action.

You are not going to purchase any furniture, movie tickets or buy groceries with your credit cards. The purpose of these cards is to re-build your credit re-rating. Here is a list of the cards I recommend that will make this plan work.

1. Orchard Bank 2. New Millennium Bank 3. HSBC Secured MasterCard 4. Capital One

Some may require a security deposit. Request an application, complete it and mail it back to the credit card company. About a month later you should have your card. Now the easy way to do this is to go by the gas station and pump gas in your car.

Look! You were going to pump gas anyway and to do it, you needed cash. So rather than use cash now, put that money into an envelope for later. Pump whatever amount you where going to pump and pay with your credit card. When your invoice comes three to four weeks later, take the money from the envelope and pay your bill. That’s it.

Use the same method with all your cards. You will see a tremendous improvement with your credit. And since you are cleaning up your credit, use other methods to remove the negatives from your credit report.

There are a few credit cards that I do not recommend. Once your credit starts to improve, your mailbox will be filled with all kinds of pre-approved credit card offers. If you are still trying to increase your score and want to apply to these offers, here is what to look for that will damage your credit again. Take out the Terms and Conditions, look where the annual fees are mention. If you see where the credit card company is requiring a participation fee, WARNING! you will be back in debt before you can come out. Don’t sign up for these cards.

If your credit limit is $300 on one of your cards and you have a annual fee of $60 and a participation fee of $72.00, you are already in the hold $132 with a available balance of $168. Some companies take the annual fee and the participation fee up front when you activate your card.

Once your credit starts improving you will see less of the annual fee. Use the method I showed you. It’s less complicated, easily to implement and a whole lot cheaper.

Never pay a process fee for a card. All you are doing is paying someone commission for mailing you a application. You can apply yourself and save your money.

 To learn how to become debt free in 3 to 5 years, go to: Click Here!