3 Ways To Sustain Your Family If Your Emergency Fund Runs Out

Yes, times are bad. The economy is not good. Jobs are drying up, as are people’s savings. There is news of job loss and salary cuts everywhere. Yes, times are bad.

Now, you may have an emergency fund, but what will you do or can do when this fund dries up as well? Be prepared for anything, or at least think these things through. Then financial shocks won’t be much of a problem. Let’s face it, people are getting desperate right now with their savings drying up, which is why loans are a big deal right now.

But if you plan ahead for such financial setbacks, you’ll be a lot better off than most. Here is what you can do if you see your emergency fund drying off.

Find out what resources you have

If you have a home, you can get a home equity credit line, which is one of the cheapest credit lines you can get right now. You can use your home to get a credit if the situation comes to the worst. However, use this option only when there is no other avenue left. Use it if there’s no food on the table and there’s no other way out. In that case, mortgage your home and do your best to find a good job in the meantime to start paying it back, or saving up for repayment.

Think about using your credit cards as well in such dire situations, before mortgage the home. Yes, interest rates for credit card loans are higher, but in tough situations, anything helps. Payday loans are not recommended as their interest rates are too high, often in 3-digits!

Cut down on bills

Before you even tap into your emergency funds, why not cut down on things you don’t need right now? Can you do it with just one mobile phone? Sell the spare. Don’t need some old clothes? How about a garage sale! Can you do without a cable TV connection? Great, do so. Anything you save right now is going to help you out. Use these first, for a bare-bones lifestyle before even getting to the emergency fund.

Your priority is keeping your home and basic utilities like power and water. If you rent a property, paying that rent is your priority because landlords can, in some areas, legally toss you out for even one month’s non-payment of rent.

If you have loans, try to negotiate the lower payments. If that’s not possible, bear with your creditors and don’t miss payments. That can harm your credit score, and spoil your future chances of getting loans.

Keep retirement funds as your last resort

This is another one of your last line of defenses. This can save you for the time being, but in time it can create a problem during tax time as you’ll have to pay income tax and a hefty penalty. Additionally, if you take money from this fund, you lose all the compound interest till now. If you do have a job, withdraw half of your retirement savings or Provident Fund.

Savings Goals - 6 Things To Do After You’ve Met All Your Savings Goals

You’ve done a lot this year. You have created a nice emergency fund enough to take you over three months of all expenses. That high interest debt you had? You paid it off too, and have started to siphon a nice percentage of your income towards your retirement.

All this is great work, but now what?

In case you are wondering how to save money beyond the basic steps, this article is what you should read.

Check your budget: Maybe you needed to have a strict budget to pay off a toxic debt. But now, with that over with, you can switch over to a 50/30/20 budget. If you are already using this budget model, reevaluate that and see what are your wants and needs. Thus, you’ll see that more money is available.

Take care of the low priority debt: You have paid back the high-interest debt first, and that’s a good thing. In fact, that’s how it should be done. But don’t stop now that it’s paid. Start paying off the low priorities debts.

Use your savings: A lot of people keep a significant part of their money in a savings account in the same bank that has a checking account. Perhaps you are doing this too. Now, this earns you maybe .06% interest a year. But this can grow faster. Consider moving your emergency fund or your savings into a different type of account. Consider Certificates of Deposits. These can lock up your money for a certain time while it earns a high interest rate. If you have extra savings, CDs can be a great option. However, these are not so good for your emergency fund since you may need it at any time. For emergency funds, a high-yield savings account is a much better option since these have a higher minimum balance requirement and have high interest rates.

• Don’t forget to invest: This is a good time to rethink how much you need to save up for your retirement. Perhaps you may need to start saving more for that, or even set up a personal retirement account. If you want to start building up a portfolio, reach out to a broker.
• Insure yourself: Revisit the basics like homeowner’s insurance and car insurance. Think about in which stage of life you are in, and what things you are preparing how.
• Think bigger: Till now, you have covered the basics. Now you can finally pay attention to savings goals and projects which you may have put off till now. Whether it is to start a new business, a family vacation, or perusing a new hobby, now is the time to do them all. Just focus on saving cash.
  

In the end, don’t forget to reflect back on all that you have achieved. Congratulate yourself on all your personal financial-related victories.

6 Things To Do After You’ve Met All Your Savings Goals

You’ve done a lot this year. You have created a nice emergency fund enough to take you over three months of all expenses. That high interest debt you had? You paid it off too, and have started to siphon a nice percentage of your income towards your retirement.

All this is great work, but now what?

In case you are wondering how to save money beyond the basic steps, this article is what you should read.

1. Check your budget: Maybe you needed to have a strict budget to pay off a toxic debt. But now, with that over with, you can switch over to a 50/30/20 budget. If you are already using this budget model, reevaluate that and see what are your wants and needs. Thus, you’ll see that more money is available.
2. Take care of the low priority debt: You have paid back the high-interest debt first, and that’s a good thing. In fact, that’s how it should be done. But don’t stop now that it’s paid. Start paying off the low priorities debts.
3. Use your savings: A lot of people keep a significant part of their money in a savings account in the same bank that has a checking account. Perhaps you are doing this too. Now, this earns you maybe .06% interest a year. But this can grow faster. Consider moving your emergency fund or your savings into a different type of account. Consider Certificates of Deposits. These can lock up your money for a certain time while it earns a high interest rate. If you have extra savings, CDs can be a great option. However, these are not so good for your emergency fund since you may need it at any time. For emergency funds, a high-yield savings account is a much better option since these have a higher minimum balance requirement and have high interest rates.
4. Don’t forget to invest: This is a good time to rethink how much you need to save up for your retirement. Perhaps you may need to start saving more for that, or even set up a personal retirement account. If you want to start building up a portfolio, reach out to a broker.
5. Insure yourself: Revisit the basics like homeowner’s insurance and car insurance. Think about in which stage of life you are in, and what things you are preparing how.
6. Think bigger: Till now, you have covered the basics. Now you can finally pay attention to savings goals and projects which you may have put off till now. Whether it is to start a new business, a family vacation, or perusing a new hobby, now is the time to do them all. Just focus on saving cash.