I happened to catch Oprah last week when she had Suze Orman on (Recession Rescue with Suze Orman) and it was an interesting show! Love or hate her Suze has some good advice! I usually can’t stand to watch her but the topic interested me. She now says that she recommends that if you have credit card debt that you only pay the minimum due! Yep, that’s right! Instead of paying more toward your debt she wants you to put that money in your emergency fund. She also says that now instead of having a 3 month emergency fund you need an 8 month fund! Mainly because it’s taking people up to a year or more to find a job these days.
I just found this so extraordinary that I wanted to bring it to your attention! Before all the financial experts would tell you to pay off your debt – become debt free and now it’s pay the minimum on your cards (and of course don’t keep using your credit cards) in order to be able to increase your emergency fund!
You know, I discussed this with some friends and some don’t even know what their fixed monthly expenses are! So they have no idea how much money they would need to have in savings. Mind boggling to me! Some have husbands who handle the finances, but honestly, even if you’re not the one to pay the bills you really need to know how much money you have in the the bank and what your monthly expenses are. I’m the one that handles the money in my family but I let my husband know every month what the state of our finances are.
Even if you think your job is safe it’s good to be prepared for the worst because quite frankly I don’t think anyone’s job is safe these days!
Eight months of basic living expenses is a lot of money to most of us! So how do you start or add to what you have? Here are a few basic money saving ideas to get you started.
Start small – if your budget only allows you to save $5 a week then save that. It really is better than not saving anything. Plus it gets you into the right mind set to become a saver. If you can save more then save more!
Sell stuff and then save the proceeds. Have a yard sale, sell on Amazon, ebay, Half.com, or Craigslist.
Re-think your essentials. Do you really need cable or can you watch tv shows on line for free (Hulu for one). Do you have to order a soda when you go out to eat or can you be just as happy with a glass of free water. Examine everything and really think about whether it really adds to your quality of life or whether it can go. If it can go save what you would have spent.
Start saving your change! It adds up fast and you can use those Coinstar machines to turn your change into dollars!
It’s tempting to spend those refund checks, bonuses, and birthday gifts! Instead stash them into your savings!
Shop smarter for everything! From groceries to clothes to electronics to home furnishings.
Those are just a few ideas. So if you are currently one of the lucky ones that still has a job, I really think it’s a good idea to ratchet up the savings account!
Here are a few more ideas from previous posts: