Savings - Set up a Rainy Day Fund

If you think things are bad now, they could get worse.  That is why it's important to have some money tucked away for a rainy day.  The obvious question:  how is someone who is flat broke going to stash some cash?

Photo By Jericho [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons

How To Free Up Credit

It's a fair question.  The answer is too start small. If you have credit card debt, set aside some of your credit cards for emergency use only.  It's important to have a card that will only be used if the car breaks down or for a medical emergency or for unforeseen vet bills.  Just set the card aside in a drawer and refuse to use it.  As you pay down your balance, you're emergency credit will build up.

How to Save Your Change

Of course, available credit isn't the same as cash.  It's better to have some cash stashed.  You can start by tossing all your coin change into a change pot or piggy bank.  Pretty soon, you'll have $20 or $30 saved up for little emergencies.  You can also put a few dollars in an envelope every pay period. Pretty soon, you'll have a little stash.

How to Save Money

But, you really need money in a savings account.  Open a savings account with your local credit union.  Take your cash envelope down and deposit it from time to time.   Get in the habit of transferring some money to savings each pay period.

Don't think you can save any money?  Look at the stupid things you spend money on.  For example, you could stop smoking and stash the money you save. Here is a calculator on how much you would save by giving up cigarettes:  Smokefree.gov.  You can also give up some small luxuries like Starbucks.  If you want to save, you have to make some sacrifices.  There are tons of ideas for saving money at FeedthePig.org.