Any type of financial crisis can wipe out your savings account and have you saying goodbye to your safety net or financial cushion.
While adjusting your budget after a financial downfall can help you get things back on track, you’ll need a plan to recreate that safety net.
“Finding” money to build up another emergency savings account can be tricky, especially if you’re on a fixed paycheck and are barely able to cover expenses.
Still, there are some things you can do to pare down expenses and improve your financial situation after a financial downfall.
Here are some tips on creating a safety net after any type of financial crisis:
Review your Expenses
Free up as much cash as possible by reviewing your expenses closely and consider what you can cut back on. Are there any luxury expenses that you can scale back on for a few months?
Can you cancel some subscriptions for a while? Will you be able to save more money each month by working out at home instead of paying gym fees?
Look for ways to cut down on your expenses and make a note of how much you’re saving so you can put this money directly into a savings account.
Scale Back the Grocery Bill
Make a grocery shopping budget and stick with it. Look for sale items, coupons and buy in bulk to reduce your weekly bill.
Groceries can be one of the biggest expenses for any household, but you can use some smart shopping tactics to get the best deals on your basics and extras each week.
Look for “buy one get one free” specials on items that you use regularly and can stock up on.
Keep an eye out for rebates and manufacturer coupons online. Keep track of your savings so you can deposit this money right into a savings account.
Increase Your Income
If you want to build up your savings cushion quickly, consider increasing your income with a part-time job.
Make sure you are putting most of this extra paycheck directly towards a savings account so that you have a safety net to fall back on in the near future.
This may not be easy after you’ve experienced a serious financial crisis, but this can be a great way to get a boost in income within a short period of time.
Revisit Your Spending Plan
If the financial crisis left you with more bills and expenses, you’ll need to modify your spending plan and budget to accommodate for the increase.
Create a spending plan that covers only your basic expenses and prioritize your bills based on due dates.
Cut excess spending and set a savings goal for each week. These savings can be put directly towards your new savings account and can help you get things back on track.