Oh no! You're about to lose your job, or the car has died an untimely and very expensive death. You've only just started your emergency savings and you don't have six months' pay stashed away yet. So what are you going to do?
You may be tempted to panic, but don't!
You need to stop shopping, cut your expenses to the bone and stash that cash. Knowing that you have cash available to pay the bills will give you peace of mind and confidence to survive whatever the setback may be.
Here are some cash-saving strategies:
*Stop shopping immediately. Live on the food in your pantry and freezer, wear the clothes and shoes you have. Cut and/or colour your own hair.
*Make minimum payments on credit card bills. This is only a temporary strategy! As soon as you find a job or get the car fixed, go back to your debt reduction plan.
*Stop eating out (the potential savings here are huge). This includes buying lunches for work.
*Cook from scratch. It's not as hard or time consuming as you might think. Stick to basic meals to cut costs and save time.
*Don't be tempted to buy expensive, convenience foods.
*To really save at the supermarket, shop the perimeter of the store and avoid the centre aisles.
*Make $2 meals. It's possible to get your meal cost down to $2 per meal and still eat well. Cooking from scratch and buying what is on sale can slash your grocery budget. Options include grilled-cheese sandwiches with tomato soup, spaghetti with meat sauce, noodles with fresh vegetables and pieces of chicken, baked, stuffed potatoes, omelettes, meatloaf, casseroles and stews and homemade salads such as coleslaw, potato and noodle salads. There is a section in the Recipe File for $2 Dinners.
*Have a garage sale. Clean your house and garage and make some money too. If your clothes are in good shape and reasonably in style, consider consignment shops. If you have more valuable items, advertise online or other publications where you don't pay unless you sell.
*Cancel your pay TV, it's a luxury you can't afford.
*Cancel your Internet access. Use computers at your public library for free.
*Stop renting videos. Check them out of the library, instead.
*Leave the car at home whenever possible. Walk, ride a bike, car pool or use public transport.
Even if you don't have a financial emergency, take the opportunity to start your emergency savings fund. If you already have one, you can use these ideas to fast track it, or increase it. Having your own 'financial insurance' will take away a lot of stress and a cash emergency won't seem such a disaster.
And last of all, stay positive. Meet the challenge head on and use it to improve your financial skills.