Green Panda Treehouse

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Photo Credit: elle_rigby

1. Automate your emergency fund deposit. This is the best step you can do because it will take the money out before you miss it. I do this and it has helped me immensely
2. Start off with 5% of your gross pay to deposit. If you’re afraid that paying yourself hurts your ability to pay bills, then start small. I’d be surprised if you noticed 5% has caused a noticeable difference.
3. Put the money in a high interest earning savings account. Pick a reliable bank that FDIC insured. Here’s an article from Trent that highlights two top contenders: ING Direct and HSBC. There’s also Emigrant Direct and numerous others. The point is to put your savings to work. Most brick and mortar banks offer less than 1% even on their savings accounts and with some of these you’ll have 4% or higher returns.
4. Cut on some bills and put the savings into your emergency fund account. I know some of view this as an excessive penny pinching, but what I’m saying is look at the list and pick where you can cut back. You don’t have to do all of them, just the ones that can fit in your lifestyle.

Areas to Find some ‘Extra’ Cash

• Look at your package deal for cable, phone, and Internet. Sometimes the deal they advertise on TV isn’t the best deal. Call your cable provider to see if they can give you a better rate. It works sometimes, but if they don’t, consider cutting back on the cable package for a month or two, just to get your emergency fund started. You may not notice a big difference and keep the change. Either way you can save $30-50/month for this and that’ll help with your fund.
• Examine your cell phone plan. Can you change your plan? With Alltel you can change it without getting an extension on your contract. I’m sure about the other plans.
• Look at your land line plan. It didn’t make sense for my husband and I to have a land line AND our cell phone plans. So far, so good. If you must have a land line and a cell phone, you may want to take off long distance with your land line.
• Compare insurance companies for auto insurance rates. I saved $50 a month on car insurance for the same amount of coverage. Shopping does pay off. Just make sure you’re given a policy that can comfortably cover you and your situation.
• Go during happy hours when you decide to eat out. I know that many college students hang out as a part of the cultural, so it would be impractical to tell you stop going out, but at least save money while you’re there. There a great place down the street that offer 50% drinks and has 50 cent tacos. So we plan our eat outs around that time (4pm-7pm). It’s still just as fun, but a lot cheaper.

These aren’t radical ideas that only the extremely frugal people can do. (By the way, Frugality isn’t a bad word.) This is simple but effective ways to get you started on building a cushion. Bad things happen to good people, so prepare while you can. If you have anymore suggestions, please leave a comment.