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We know we need an emergency fund, but how can we do that in the middle of the coronavirus crisis? Today we'll share the strategies you can use now to get a jumpstart on saving!
How to Save Money
Right now many states are opening up, but we’re still encouraged to stay home as much as possible.
And that’s most likely affected you on several levels, including your finances.
Last episode, we discussed steps you can take to shore up your budget and handle the bills when you’re dealing with a job loss or significantly reduced hours.
This week, we’re switching gears and digging into one of the fundamental things you need to have – savings.
We’ve heard it so many times, we need to have an emergency fund. Now it’s really both a necessity with routines, work schedules, and budgets being in flux for at least the next few months.
But can you save and build up your financial cushion during a time like this? How can you create a plan when you’ve been thrown into the middle of all this?
On the podcast, I have Jeff Anzalone from Debt Free Doctor here to share how he and his wife got to that point.
As you just heard in the teaser, when he first started things, they looked like a mess. The job he had planned on taking fell through. So here he was dealing with a massive amount of debt, no job, and a wife and baby to take care of.
So in this interview, we’ll get into how they came up with a plan quickly. We’ll also get into not just the process he used to get out of debt, but what changes they had to make with their budget and more to start building savings and more.
We also have Joe Mecca from Coastal back on the podcast. He’s a natural saver so he is sharing tips on how to make the process easier and less stressful.
In this episode we’ll get into:
- Why and how much you need to save
- Creating a plan on the fly
- Ways you can build up that financial cushion ASAP
Let’s get started!
Resources to Easily Stay on Top of Your Money
Here are some resources we mentioned in the episode as well as some other handy articles to check out:
- Best Budget and Money Apps: Personal Capital, Tiller, Mint, Honeyfi
- Grow Your Stash Faster: High Yield Savings with CiT Bank
- Jumpstart Your Marriage and Your Money
- Your Money: A Hub for Help During the Coronavirus Crisis via The NY Times
- COVID-19 Financial Relief Info for Those Impacted via @ I Heart Budgets
- Emergency fund: Why you need one
Thank You to Our Sponsor Coastal!
Support for this podcast comes from Coastal Credit Union. If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today!
We’ve been Coastal members for a few years have been happy with their services.
If you’re a member and you’ve been financially affected by the coronavirus, Coastal has a member assistance program to ease the burden.
How Much Money Should You Save to Ride This Out?
One of the big questions couples have been asking has been how much do we need to save.
And the exact number really depends on several factors.
- Your current employment situation [Are you both working right now? What’s the situation long term?]
- Your family’s monthly essential expenses
- Your Family Situation [Do you have kids? Do any of you have health issues where you may need to include medical expenses?]
So you two have to discuss this to get your exact number, but if you’re looking for a guideline, then you want to focus on getting your financial cushion up enough to cover a few months of expenses.
However long this crisis may last, building up your emergency fund aside is a smart money move.
Now you might be thinking that saving 3-6 months is impossible. And if you’re trying to do it all at once, it can be.
We’ll get into how you can start finding and redirecting money towards your emergency fund in a bit.
Before we get to that though, I want to hone in some of the frustrations and hurdles couples have with making and keeping their emergency fund ready.
For some couples where they keep their account has a huge impact on their savings. An emergency fund is a different beast than your general savings.
And since it is for special cases, you need to strike the right balance with having access while not having temptation.
And while I want your money working for you, with your emergency fund, you don’t want to be moving accounts and being a rate chaser.
Remember, we’re going to an easy system to set up and maintain. If you want to stash your emergency fund in a high yield saving, go for it. Just don’t move to get a fraction of percentage more.
In the show notes, I’ll link to my guide to getting a great savings account for the two of you to make the process easier.
Oh, and please wherever you choose, make sure it’s either covered by the FDIC (banks) or NCUA (credit unions).
Creating a Plan
Based on what I’ve been seeing on the site, in emails, and on our Thriving Families Facebook group, I understand it’s been a struggle to find your financial footing, even with something as important as savings.
Between stay at home orders, figuring out how to work (whether it’s from home on the front lines), and if you have kids, getting their schedules in gear, it’s understandable if you’ve hadn’t had much time to reevaluate and review your finances.
Perhaps you’ve gotten your April and May bills taken care of, but not much else. Honestly, many of us have had to scramble to adjust our finances to ride things out.
But focusing just on paycheck to paycheck is not only not good for your long term finances, but it’s also added stress on our mental health.
One of the best ways you can help yourselves financially (and get some peace of mind) is by setting up a plan.
But how do you create a plan that fits your goals when you’re in the middle of a crisis?
Years ago when Jeff just finished dental school, he had to deal with that situation. The original plan included joining a practice, but when that job fell through, he had to make ends meet somehow.
I thought this is something many of us going through this usual time can relate to. Ideally, we make rational decisions with our finances, but sometimes the motivation is a mix of external circumstances and a bit of an internal push.
And with this change came a mind shift for Jeff.
I do hope you’re not in dire circumstances with your money. However if the two of you are looking at the budget and you’re frustrated and stressed out because you don’t have enough in savings, then there are some ways you can start adjusting an dredirecting your money.
For Jeff, it was about going lean.
Ways to Build Up Your Emergency Fund ASAP
But just as there are certain bills where you are spending more – for us, it’s groceries and home improvement – there are probably areas where you may see an opportunity to redirect some money.
For us, we saw our food drop, even though we've been spending more on groceries. Why? Because we no longer are eating out for lunch and since we are home, we now have more time to prepare meals, opening up options.
I'm still at around half a tank of gas even here at this 8th, 9th week (I can't keep count!). Same for my husband.
I wasn't a big commuter before so my savings is modest, but for my husband, he's saved about $200 right there.
So if you haven't already, go ahead and get a snapshot of your money. Find out how much is coming in now and how much you're spending.
One of the easiest ways I’ve found is using an app to keep tabs on all of our accounts.
Start redirecting that money towards your emergency fund or financial cushion.
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