How To Rebuild Your Depleted Savings
Q: The last few months have been rough on my finances, and I’ve used my savings to get by. My emergency fund and savings accounts have dropped to zero. With my financial situation improving, I’d like to start building these up again. Where do I begin?
A: Using emergency funds to survive prolonged unemployment, an unexpected considerable expense, or a medical emergency is the best way to make it through financial hardship. If your savings are depleted, it’s best to start rebuilding as soon as possible. Here’s how:
Set a goal
Before saving money, establish a tangible goal; you can try to recover the value of the savings lost or start smaller with a more attainable goal. Bear in mind that experts recommend having funds to cover three to six months’ worth of living expenses set aside in an emergency fund or savings account.
Trim your spending
An excellent place to start finding extra dollars for saving is by reviewing your spending for ways to cut back. Look for expenses that can make a difference in a monthly budget without dramatically affecting the quality of life.
Find a side hustle
A great way to land extra funds is to find a side job that doesn’t require a significant investment of time. Some options include taking surveys on sites like Swagbucks and doing gig work for companies like Uber and Rover.
Sell your old treasures
Turn forgotten treasures into moneymakers by selling them online. You can sell old clothing on Thred Up, unwanted jewelry on Worthy.com, and unused sports equipment on Swap Me Sports. Use the cash earned from these sales to jumpstart your new nest egg.
Make a plan
Once you have a goal in place and you’ve maximized monthly contributions toward savings, it’s time to create a plan. When putting away as much as possible each month, map out a timeline of how long it’ll take to reach your goal. Remember: The more aggressively you save now, the sooner you reach your goal.
Start saving
The best way to ensure that putting money into savings each month happens is to make it automatic. You can set up an automatic monthly transfer from your Checking Account to your Savings Account on a designated day of the month. Give us a call to discuss your options.
Put unexpected windfalls in savings
To speed up the rebuilding of depleted savings, you may want to resolve to put unexpected windfalls into an emergency fund or savings account. This emergency can include tax refunds, work bonuses, and gift money.
Now you have some steps to take and know how to rebuild your depleted savings. Rebuilding depleted savings isn’t easy, but the security of having a safety cushion to get you through a financial setback will make it well worth the effort.
