Cutting Expenses To Build Emergency Fund
This is a follow-up article to How To Build An Emergency Fund. In this article I’m going to outline how I shaved off $200 off my monthly expense so that I could start building my emergency savings fund.
As I had indicated, my personal plan is to build an emergency fund equivalent to about 3 months of expenses.
Focus on The Right Expenses…
I decided not to sweat over miscellaneous expenses that come up each month. In other words, I didn’t worry about the odd Starbucks coffee or the occasional lunch. Cutting back on these expenses will save some money but it won’t be anything substantial. It also won’t be consistent because, by nature, these expenses are occasional and may or may not occur each month. So focusing on expenses that are constant each month is the place to start.
This is how I cut back on my expenses: -
| Expense | Savings | Comment |
| Home Security | $34 | Even though I’ve had this service for 12 years, it is an expense that will add to my bottom line. My two dogs will be new security system, and I’ comfortable with that. |
| Sparkletts Water | $35 | This is an absurd expense. Water is the most abundant element on this earth, so why the heck should we have to pay for it? |
| International Calling Plan | $35 | This is what Verizon was charging me for unlimited calls to certain places in Europe. It turns out that I made maybe 3 calls per months lasting a total of 60 minutes or less! I got RingBritain instead and funded the account with $10 which should last me 18 months!! |
| Sunday Newspaper | $15 | Out of habit I never stopped Sunday paper delivery even though I hardly ever read it. Most of news is delivered via RSS online. No need for printed paper anymore. |
| TV Movie Channels | $30 | Verizon and other TV and cable companies are very good at bundling offers. The problem is you end up paying for stuff you never use or watch. I never movies on any of the channels I canceled. Most are repeats anyway. The way to watch movies now-a-days is via Redbox. |
| Pest Control | $35 | Agian, this is a service we’ve had forever just because of where we live. However, $35 is a lot to pay. If I start seeing critters and spiders around the house I’ll address the situation then, but I do not want to pay a monthly fee for this. |
| 1 family dinner | $50 | This one was the hardest to cut, but it also had the biggest cost saving. Oh well, sometimes you just have to sacrifice to meet your goals. |
| Total Savings: | $234 |
Next Steps
So that’s how I did it. Now, saving just $200 per month will still take me 5 years to accumulate $12,000 which is my goal.
Since I accomplished my initial sub-goal of saving $200, all I have to do now is figure out how to reduce the 5 year timeframe so I can accomplish my goal quicker. This however, should be the second step. The most important step is figure out what your emergency fund should be and then get started immediately.
My next sub-goal is to save an additional $100 for a total of $300 per month. And with $334 savings per month, my original timeframe of 5 years would be reduced to just under 3 years!
I will write a follow-up post to this article to let you know how much more I shave off my expenses. Stay tuned.
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