It’s Tough to Save Money When You Are Already Broke

One of the best ways that anyone can utilize in order to keep credit from getting worse or the debts from piling up further is to have a savings cushion on which to draw upon when life’s unexpected events come to call. Your goal should be to save three to six months of living expenses in a savings account that allows you access to the funds when you need them.

You are probably thinking at this very moment: “I’m having problems paying yesterday’s bills - now you want me to save six months’ worth of expenses for tomorrow?” Yes, that is exactly what we want you to do. However, and this is a big however, you don’t have to do it all at one time. Saving even as little as $10 a month will start the ball rolling and help develop the habit of saving for your future.

Get in the habit of saving some of your income every month. At first it may be very, very little of your income, but if you establish the habit of saving, the amount you’re able to save will grow with time, as will your balance. If you open that account, the next time you get a raise, you’ll have a place to put that extra money you haven’t been used to receiving. For example, have at least half of your raise direct-deposited into your savings account every month.

Saving money that you aren’t already spending is the easiest way to do it. Whenever a bunch of money shows up, half of it goes to the bank. IRS refunds, birthday cash, overtime, or that $10 bill you found on the street. Half for you, half for the piggy in the bank. Even saving a few dollars at a time will get you going and will gain momentum over time. Soon, you won’t be living for that next paycheck!

One of the frustrations of clearing up your credit is that life goes on - even while you’re trying your hardest to recover. You may be faced with unexpected medical bills, a job loss, or any other number of events that can affect your finances when you can least afford it. If you have even two weeks of expenses in the bank, you’re vastly better off than if you had nothing. And this will be invaluable in keeping your bad credit from getting worse.