How to Build Savings After Hard Times

by financialmom on July 2, 2010

in Emergency Fund, Money

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I did an Intelligent Investing Radio Show awhile back with answers to listener submitted questions.  This question was a really good one, and well worth repeating in a blog post.  This is for all of you who have ever watched your savings go down and down to nothing, whether it was because of a job loss, medical bills, debt, or whatever it may be.

Here is the question: What is the quickest way to save money after facing hard financial times?

Emergency Mode

The first thing to realize is if you have no savings, and as a result no emergency fund, you should still be in emergency mode. Now I don’t mean in panic mode, but you need to be very careful with your money.  The following are some ideas on how you can save money quickly and build your emergency savings back up.

Expenses

If you have not been paying close attention to where your money is going, you need to start immediately. And I mean keeping track of where every penny is being spent.  Compare this your spending plan, and see if you have any money leaking, or if you can reduce any of your expenses.

Unnecessary Spending

After you have looked at where your money is going, it’s time to be really honest and decide where you are spending unnecessarily.  Go through your spending habits, and evaluate every one to assess whether it can be eliminated.  You may need to make some hard choices here, but it has to be done.

Debt Payments

If you have debt, you may need to make minimum payments on it for awhile. You know I hate debt, but having no emergency savings will just create more debt in the long run.  Lower the payments in the short run to give you time to build the savings up.

Sell Stuff

We all have stuff we are not using.  This is the perfect time to go through all your stuff, and get rid of some of it. Watch a few shows of Clean House to get the idea (love that show!).  Summer is the perfect time for a garage sale, or if you are into online selling, try Craigslist or Ebay.  You probably know someone that has done online selling and could help you if you don’t know how (ask your kids icon smile How to Build Savings After Hard Times ).

Investing

You know I hate to say this, but if money is really tight, you may need to consider suspending your investing for a short period of time, until your savings are replenished.   Talk to your financial advisor before making this decision.

The piggy bank in the picture above is the Money Savvy Pig, a very cool product of Money Savvy Generation.  I love this bank – it’s a great tool to teach your children the four things they can do with their money – save, spend, donate, and invest. Hint – it makes a great baby gift!

Susan Beacham also has many other resources on Money Savvy Generation to teach elementary school-aged children money management basics.  Teach your children good money habits when they are young, and help create a money savvy generation!

 

New Profile Pic 2599R How to Build Savings After Hard TimesPamela Otten is CEO of Pamela Otten LLC, a Registered Investment Advisor. She loves to work with women business owners and entrepreneurs, and women in transition due to job change, death, or divorce. Pamela will help you set and reach your financial goals, educate you to understand your investments, and teach you how to do more charitable giving. Pamela is a Qualified Kingdom Advisor (www.kingdomadvisors.org), trained and committed to integrating biblical principles with her investment advice.

cc smallest How to Build Savings After Hard TimesPhoto Credit – Money Savvy Pig

Financial Planning, Investment Advice, and Investment Management provided through Pamela Otten LLC, Registered Investment Advisor.

The opinions voiced in this material are for general information only, and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, please consult your financial advisor prior to investing.

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