What if your refrigerator unexpectedly quits? Or you need to cover your insurance deductible after an auto accident? Or your 3-year-old knocks your laptop onto the tile floor?
Mishaps and malfunctions are — unfortunately — part of everyday life. The good news is that planning ahead and having emergency cash on hand can make these not-so-great situations better instead of worse.
Don’t think you can afford to pull any more from your budget to stash away for that rainy day? Here are seven tips for trimming expenses (while hardly even noticing).
1. Look at your spending habits
Beth Kobliner, author of The New York Times bestseller "Get a Financial Life," recommends keeping a detailed spending diary for two weeks to get a sense of where your money goes. "The key is getting a handle on your current spending habits and then reevaluating your priorities," she writes.
2. Find your inner chef
Skipping dinner out twice a month at $25 a meal could mean a yearly savings of $600. Brown-bagging your leftovers for lunch could potentially save you another $240 if you would normally spend $10 eating those lunches out.
3. Daily drinks: Do it yourself
Whether it's a cup of coffee or purified water, it always costs much more to have someone else make it for you. (A daily $4 espresso drink adds up to more than $1,400 per year!) Instead, buy a coffee maker or water filter — and save significantly over the long run.
4. Get the best deals
For groceries, clip coupons and scan your store's weekly flyer. For retail purchases, check online for coupon codes. Big-ticket items? Investigate price-matching programs, which often offer 10 percent below the lowest advertised price.
5. Check for used first
Need a new bike for your 12-year-old? Do a quick search on your local Craigslist site or check second-hand shops.
6. Stick to your shopping list
Curb those impulse buys. Research shows that most people regret nearly 80 percent of their nonessential purchases within a year — and that can add up to a lot of wasted cash.
7. Clean house
You know all those impulse buys? Recoup at least some of those expenses (and profit from other items you no longer use or want) by holding a garage sale, or posting on eBay or your local Craigslist (it’s free!).
Help Your Savings Add Up
Once you have funds to set aside, consider ways to make that money work even harder for you. For instance, by placing it in an interest-bearing account, you can add up even more savings, faster, with no effort at all! Your Rabobank representative can talk with you about Rabobank savings solutions, such as savings or money market accounts, or CDs. Call (888) 945-6600 or visit your local Rabobank to learn more.
Quick Tip: The Three-Month Goal
A general rule of thumb for rainy day funds is to save enough to cover three months of living expenses. Figure out that sum, decide how long you’re willing to take to accumulate it, and then calculate how much you’ll need to save each month.
Rainy day goal: $3,000
Timeline: 1 year
Monthly savings: $250
The information contained in this article is intended for general educational purposes only and is not to be construed as legal, tax, or financial advice. Please consult with your own legal, tax or financial advisor for guidance with your own particular circumstances.