A testimony from Teresa
My husband and I have long struggled with debt (a struggle we continue to this day). But recently, we decided to try not to put anything on credit cards. This was a big step, as our “emergency fund” had always been a credit card. Now, we are carrying a $1,000 emergency fund.
A couple months ago, our car was in the shop, and we rented a vehicle. While the rental was in our possession, the bumper got scratched. We had declined all the “additional insurance coverage” offered by the rental company, as it was extremely expensive, and our regular car insurance covers rentals.
When we returned the vehicle, we were required to pay a $500 down-payment toward the repair. We decided to wait until we got the estimate to decide whether to pay for the damage out of pocket or submit it to our insurance company. We did not want a small claim driving our insurance prices up.
Boy, am I glad we waited as the repair cost less than $300! We actually got $200 of our down-payment back — and it went right back into our emergency fund. Because of our emergency fund, we had the luxury of paying for the repair without having to pay higher insurance premiums or high interest in the long run.
We built our emergency fund slowly, over several months. We did not have the “wiggle room” in our budget to set aside any money for savings.
When we committed to building the emergency fund, however, we began to reevaluate. Here are my tips:
1. Call your service providers.
My husband was not willing to cut out our cell phone service or cable completely, but he was willing to negotiate lower prices. He got our cable cost cut in half and our cell phone bill cut by one-third, all without losing any of the channels or services we use. Save first.
2. Save first.
Even if there is no money in the budget for savings, do it anyway. It is more difficult to avoid paying a creditor than to avoid putting money in the savings account.
The savings account does not make collections calls! Basically, if there’s more month than money, I will find a way to pay the power bill, even if I have to sell something on Craigslist to make it happen. Likely, I would not be so vigilant about my savings.
3. Be proactive.
Use sites like MoneySavingMom.com to find ways to save on everyday things.
4. Most importantly, find a way to save.
It’s terribly difficult for most of us, but even if you can only save your change in a coffee can, it’s worth the effort. The savings will eventually stack up, and even if you only have $60 in savings when your next emergency arises, that will be $60 that doesn’t have to go on credit!
Teresa is a Christ follower, a wife to Steve, and a mom to Elijah, Grace, and two dogs. She has a full-time job outside the home. She is a Florida girl with a love for the beach, chocolate, and a good book.
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