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For millions of Americans, the Covid-19 pandemic has been a financial shock.
While the federal government stepped in to help, those best positioned to weather the crisis had emergency funds set aside.
Experts say having an emergency savings fund should be a top priority so that you can cushion an unexpected financial blow without going bankrupt.
According to certified financial planner Ted Jenkin, CEO of Atlanta-based Oxygen Financial, the ideal number to achieve is at least three to six months of living expenses. If you are more financially prudent, you may want to set aside the value of a year.
Yet finding that extra income can seem like a big hurdle, especially in an uncertain economy. The good news is that you may be able to save money just by changing the way you manage the resources you already have.
1. Re-evaluate your credit card habits
2. Reduce your monthly bills
There is a good chance that big savings will be made by re-evaluating your daily expenses.
Jenkin, who has co-authored a book called “The 21-Day Budget Cleanse,” recommends people take a detox approach to their family budget.
Look at the 21 biggest bills you have – if you have that many – and try to compare or change them.
Take, for example, your bundled Internet, telephone and cable bill. Ask your provider if there is an opportunity for a better plan or a better rate. Also consider other options available to you through other companies.
“Most people really haven’t taken the time to see where they’re overspending and assess the difference,” Jenkin said.
3. Put your money in a safe place
Even with interest rates still at record highs, a savings account at an online bank or local community bank is still the best place to go to make sure you can access the money when you have it. need, Jenkin said.
If you lose your job or start a business, you’ll want quick access to your money.
“You can’t afford to put it on crypto or on the stock market,” Jenkin said. “To do that over three or six months is to play.”
4. Sell what you don’t use
If you haven’t used something in a year – other than heirlooms or holiday decorations – it’s time to sell it, Jenkin said.
If you haven’t worn a shirt for a year, for example, you can upload it to a website like Poshmark. Electronics that you don’t use can be sold on sites like Decluttr or Facebook, Jenkin said.
“There are a lot of apps and websites out there to sell your products,” Jenkin said.
If you’re not ready to part with an item forever – like an extra car, for example – you may want to consider renting it from a website like Turo instead.
5. Choose a secondary activity
Generating more money doesn’t have to end with selling your business; you can also sell your skills, Jenkin said.
Websites like Fiverr will allow you to list your services so that you can make some extra money.
“If you have energy, skill or talent, try to earn that extra income to build up a bank of money,” Jenkin said.