We have all heard how important it is to have cash reserves. However, a recent survey by Bankrate showed that 63% of Americans could not pay a $500 unexpected expense because they did not have the savings. In general, individuals should have at least 3 months of monthly living expenses to fund unexpected expenses. The important thing to consider is that without having an adequate amount of cash reserves, you could struggle to have a comfortable financial future.
Building a cash reserve can be challenging but here are a few ways to add to your savings without too much pain:
- Create a budget – make sure it is realistic and manageable and as flexible as possible if you need to cut out some things in order to accumulate cash reserves
- Review your existing budget for ways to cut unnecessary expenses – we all buy things that we don’t really need. Eliminate your daily coffee from the local coffee shop and you could save hundreds of dollars. Better yet, bring your lunch to work instead of ordering from a restaurant and you could add several hundred dollars more to your savings.
- Stop paying for that gym – instead of driving to a gym, take a long walk or run. Ride your bike in the great outdoors rather than using one at a gym.
- Plan your weekly dinners – instead of going out to dinner or picking up take out at a local restaurant, plan easy meals to make at home.
- Use cell phone instead of a home phone – eliminate a home phone and use your cell phone for all calls. You’ll appreciate the savings and one less phone number to have to remember.
- Eliminate cable TV – this expense could be a big money saver. Instead, watch your entertainment on a streaming service or the internet or read a good book.
- Look for additional ways to save – ride share to work or school, forgo the new outfit, host a potluck rather than meeting friends at a bar or restaurant.
There are numerous ways to save. Be creative and find the ones that work best for you and put that savings into an interest-earning account. Don’t be too hard on yourself, the key is to balance saving for the future while enjoying today. Have fun with it! Remember that having cash reserves will empower you and will help you feel better prepared for your future.
Mario Hernandez has been a Certified Financial Planner (CFP) for over 30 years and brings a vast amount of experience in the financial planning and investment management business. Through Longevity Wealth Management, Mario provides holistic planning services that help clients find solutions to live their best life. Mario’s email address is mario@longevitywealthmanagement.com. Securities offered through Osaic Wealth, Inc. member FINRA/SIPC. Investment advisory services offered through Longevity Wealth Management. Osaic Wealth, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Oasic. Certain insurance products are offered by Mario Hernandez as a licensed agent independent of Osaic Wealth, Inc.. Mario Hernandez is not affiliated with Osaic Wealth, Inc. or registered as a broker-dealer or investment advisor.
