Have Both An Emergency Fund And An Annual Bill Fund
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While trying to live within your means works you need to also fund out of your cash flow an emergency fund and an annual costs fund. Once those are funded , everyday buffets don't make such an impact from needing a new washer to a long call to the plumber.
The best change we accomplished was when we had an annual living expenses fund. That meant we could live without any money coming in for a year. For me, this fund was actually better than anything.
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I set at least $20 per paycheck away as an emergency fund. This is cash that we cannot use until an actual emergency arises, such as a hospital bill, loss of pay, etc. Otherwise, it is there to be saved. It adds up quicker than you would think!
When planning a trip overseas, I created a "Finland fund." I would frequently empty my entire change purse into an old-school Tootsie Roll bank. But more importantly was the fact that every quarter I received, and every $5 bill would be added to the fund. It added up fairly quickly. (I must admit to sometimes hoping for a $5 bill in change, and other times, hoping I'd get 5 singles that could be spent!)
When your paycheck comes in, put a preset amount of money in a savings account - before you do anything else. Better yet, have it go their automatically. Whether it is $5, $50 or even more, pay yourself first to establish that 3 to 6 month emergency fund, then work on your Christmas fund or whatever else you designate.
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