Family Budget for Emergencies

Do You Have a Savings Plan in Place?

Jun 23, 2007 Denise Oliveri

Almost any family will tell you that it is important to save money for unforeseen emergencies, but how many are actually implementing a plan?

Having a savings account sounds great. You develop a family budget, where you put a little money aside and eventually it accumulates to a big lump sum. It is a safety net, giving you a sense of security. It can also help you when a sudden emergency strikes your family that otherwise would put you into either a bit of a bind or a major setback. Does your family have a savings plan in place?

Unfortunately, many families do not have enough savings in the bank to cover any type emergency, whether it be big or small. In fact, according to a Bankrate.com article, " ...the national annual savings rate fell in 2005 to its lowest point since the Great Depression: negative 0.4 percent. Since then, it has continued to fall, registering at negative 1.6 percent in May 2006 and negative 1.5 percent in June..." In the same article we learn that, "In 2005, Americans spent a record $9.07 trillion, up 6 percent from 2004 when consumers spent $8.5 trillion." (Posted October 1, 2006). Americans are clearly spending more than they earn, which leaves them with little or no savings.

So, now are you ready to set up a savings plan to protect your family in case of an emergency? An emergency does not necessarily have to be a catastrophe like hurricane damage, but even something as simple as replacing a hot water heater in your home can put a burden on your finances. Here are some tips on how to save money by cutting down on a few things from your budget.

Cable: Downgrade your current subscription or get rid of cable altogether. When you have met your savings goal, you can always add this back into your budget.

Entertainment: Cut down the amount of times you go out to eat or order-in. You will be surprised how much that adds up monthly, if you frequent your favorite restaurants weekly. Another good idea is to borrow books from the library instead of buying them. Again, this can be temporary just until you reach your savings goal.

Gifts: Discuss with your family and friends that your family has developed a savings plan and that you would like to make a deal about gift-giving for a bit of time. Perhaps you can make homemade gifts to exchange, or at least set a reasonable limit on what you buy. This way, you will not have to feel guilty about giving something less expensive, and getting something more expensive. Besides, homemade gifts come from the heart, too.

Phone: Cell phone companies are offering all kinds of cool plans these days. Hook up with a plan that lets you pay only for the minutes that you actually use. Do away with that monthly fee. And, are you still paying for long distance service on your home phone? Have you considered using your cell phone to make long distance calls on weekends when the minutes are free? You can drop the home phone services that you really are not using.

ATM machines: While ATMs make it so convenient to get quick cash, be sure to use your bank's machines. Why give another bank $2.00 or more every time you need cash? Add that up over a year and see how much you would have saved in service charges. Wow!

Look here for more great ways to start saving today.

The copyright of the article Family Budget for Emergencies in Family Finances is owned by Denise Oliveri. Permission to republish Family Budget for Emergencies in print or online must be granted by the author in writing.

A $50.00 bill