As I've written before, I am 46 years old, and after losing my job and experiencing extensive medical issues that made liquidating my 401(k) necessary, I have less than $100 in savings for retirement or anything else. While I am still looking for employment and have exhausted my unemployment benefits, it is difficult to find the money to keep the lights on and prevent foreclosure on my home. Many in my predicament would not worry about saving for retirement or anything else, but I think this attitude will only lead to prolonging my misery and financial insecurity.
I now have two goals as I struggle to make ends meet without regular employment: save money for an emergency fund and begin rebuilding my retirement savings.
My first goal is to save $500 for an emergency fund. One thing that I have learned, particularly after this most recent financial disaster, is that saving for one's retirement is impossible if you do not first have an emergency fund. With an emergency fund I am able to resist the temptation to dip into my retirement funds or to pay for things on credit.
If you are like me, how do you save for your emergency fund or retirement if you are living on the edge and scraping just to make ends meet? The key is tried and true budgeting and getting everyone in the household to stick to the budget. Examining expenses and making a realistic budget that everyone follows is easier said than done.
Eliminate Unnecessary Expenses
While I am unemployed, my husband is still working, and has a retirement fund, so he doesn't feel as desperate as I do about our financial situation. Everyone has their private little sacred cows and indulgences that one does not want to give up. My husband insists on his morning coffee and biscuit from one of the popular fast food chains. "It's just $2.65 a day!" he exclaims. That is $18.55 a week, or a little more than $74 a month, and yet for less than $10 he or I could make that same sausage biscuit and cup of coffee for him each day for a month. That's a savings of $64 a month or $768 a year. Just eliminating this one expenditure we could replenish our emergency fund in about a year.
Resist Paying More for Convenience or Using Coupons for Unnecessary Items
There are other expenses we could easily eliminate that we think we can't do without. When shopping for groceries, I find that I can save drastically simply by not buying what I would call convenience items or buying items I don't normally use just because I have a coupon. It's not really saving if you aren't going to use it, is it? I really love the convenience and scent of some of the antibacterial wipes and the nice scents of some of the cleaners, but they are both more expensive and don't really get anything cleaner than using a paper towel and spraying on some generic cleaner or using a dish towel and some warm and soapy water. The same goes for many prepackaged foods. I've been using the internet to search for creative ways to use common, relatively cheap ingredients such as beans and rice to create new dishes that are both tasty and inexpensive. Using this strategy, I saved an additional $100 this month at the grocery store and I have added it to my savings fund.
Eliminate Services You Don't Fully Use
I also cut back on my Netflix subscription to streaming since we didn't return the DVDs often enough to justify the extra $20 we were spending each month to have 4 out at a time, and I was able to lower my car insurance by $30 a month by calling and asking the agent to help me save money and found out that I qualified for a discount because I already bank with an affiliated partner. It never hurts to call the companies you subscribe to services and ask, is there a way I can save money so I can keep your service?
By examining our sacred cows and giving up a few indulgences, I've saved $214 this month to add to my $100 in savings. In another month I will have replenished our emergency fund and can begin to look for ways to start rebuilding my retirement fund. Regardless of your current financial situation, it is important to take steps to save for unexpected emergencies, even if you are like me and are still trying to survive a financial emergency.
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