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    Here’s How You Can Start to Build Yours

    In January of 2017, CNN asked Americans about their savings, using a single question:

    If you were suddenly hit with a $500 unexpected bill, would you be able to cover it?

    • 41% reported having enough money in savings


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    • 20% would have to put the expense on a credit card
    • 20% would have to cut other spending to come up with the cash
    • 11% would need to turn to friends and family for assistance

    On the whole, the news was somewhat better than the previous year where only 37% were able to draw from their saving to pay this sudden expense. But, the sad truth is that $500 is hardly enough money to cover a major health emergency or the loss of a job. Yet many Americans just don’t have the money they need should something unexpected happen.

    But what does it mean to save for a rainy day, and how can you start?

    Budget for Essentials

    Start by keeping track of your spending to see where it is your money goes. Using a simple monthly budget, track all income and expenses to determine which items are essential and which one you can do without. Look for hidden expense like online music and TV subscriptions that are paid via credit, debit, or automatic withdrawal.

    Finding Savings

    Take advantage of direct deposit and have a portion of your pay go directly into your savings account. Do the same with any extra money that comes your way, like a pay raise, bonus, or tax refund. If you don’t see, it you won’t spend it.

    Simple ways to find additional savings:

    • Consider giving up cable. With so many alternative ways to access TV — including antennas that capture HD — canceling that ever-increasing cable bill could save you a lot of money each month. If you can’t give it up completely, drop services for the summer. Get outdoors and stream your shows to binge-watch on a rainy day.
    •  If you’re not really using it, cancel your gym membership or look for a better rate elsewhere.
    • Ask your doctor about replacing brand name medications with less expensive generics.
    • Install a water filter or use a filtered carafe instead of buying bottled water.
    • Replace name brand food items with store brands.
    • Buy in bulk when staples are on sale, like chicken that can be frozen, or paper towels, or even sheets.
    •  Never shop for groceries when you’re hungry.
    • Make your own coffee a couple times a week. If you don’t like instant or home-brewed, invest in an espresso maker. If you must go to Starbucks or Dunkin’ everyday, downsize your drink or opt for one cup instead of two, and skip the food in favor yogurt or oatmeal at home.
    • Whether it’s your health, your teeth, or your car, avoid unexpected costs through preventive care.
    • Carpool, whenever possible.
    • Use Craig’s list and eBay to turn things like old electronics and furniture into cash.
    • Don’t shop impulsively, especially online. Opt out of receiving promo emails.
    • Keep credit card spending to a minimum to avoid paying interest, and don’t rely on overdraft protection to pay for things you can’t afford.
    • Get quotes on car and home insurance to see if you can improve your monthly cash flow.
    • If you haven’t recently, consider refinancing your home. You may get a lower rate, which can lower your monthly payment.
    • Replace old traditional light bulbs with new LED bulbs. They may cost a little more up front but they last up to 10 times longer.
    • Caulk leaky windows and change furnace filters, for heat and AC efficiency.

    Sacrifice for Security

    Experts suggest having six months’ reserves of your current income as a backup, in case you lose your job or have a medical or home emergency. Sacrificing short-term leads to long-term security. After all, you never know when it’s going to rain.

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