Build Your Low Income Emergency Fund With Easy Account Setup
When you live paycheck to paycheck, making any savings borders on laughter. However, by changing the way you pay your bills every month, you can save on a rainy day.
As personal finance site One Cent at a Time explains, you probably have multiple variable accounts. Typically, for variable costs, you can budget the average amount you would normally pay. Instead, set aside the maximum amount you can pay. This money does not necessarily count as additional money as you may end up paying it and you need to be prepared for that. However, if you get a smaller bill, you can save a little extra:
Typically, we average costs when budgeting for a specific month. Now stop categorizing the average as variable costs. You start to distribute the maximum spending you have had in the last 12 months. If your electricity bill was $ 160 in January, set aside $ 160 each month. In the summer, when you receive fewer bills, you will have more surplus.
This setting will make your budget more limited, but you’ll also be better prepared for the more expensive seasons. Over time, the excess you save with this method can become your emergency fund. You may not be able to retire because of the difference, but if a costly emergency occurs, you can spend the money saved on it.
Creation of a Low Income Emergency Fund | One cent at a time