Many Canadians are living pay cheque to pay cheque. It is a plain fact. If this is you, please know you are not alone. I’ve been there done that. If one of your New Year’s resolutions is to start saving a bit of money in 2018, let us start with the best way to start an emergency fund in 2018 even when you are living pay cheque to pay cheque. Yes, it can be done.
The Reality Check
First up, before you can move forward, we have to look at our past. We have to look at our current and past habits. Can I challenge you to look at your budget if you have one? If you don’t have one you want one, stat! For me, the best way to do this was to track my spending. Write down every penny you are spending as a family. This may seem daunting at first but by carrying a small notebook with me, I was able to track my spending. You can do it too!
The Road Map
If you don’t already have a budget in place, this is where you start. Look at what you have been spending. Look at your priorities. I was surprised at how much I spent in certain areas in mindless ways. Every penny does matter when you are living pay cheque to pay cheque. Set your priorities, if savings is a priority that you really want go for it! Find areas you can cut or do less. Starting small is ok. Even $10 a week makes a difference over time.
If you need help on how to set a budget here are a couple of posts from friends of mine that helped me:
Quick Start Your Savings
I know as I look around my home there are several things I am not using. Right now, there is that bread maker I got last Christmas and used twice, there is the old camera collection that is gathering dust, and the pile of books I have read. Take a look around your house, what if you sold these and started your nest egg, your emergency fund with the proceeds? Most of us have a few things we can sell for a profit. I use Kijiji when I have things to sell. By selling even $200 in goods it gives you a starting balance.
Add to Your Income
For those of us who are parents, it can seem hard to find the time to add to our income. It isn’t always easy for anyone. You can freelance your skills if you have one. I know several friends who supplement their income writing for blogs and brands. I know some younger girls who babysit. Others I know dog walk. What could you do for a few hours each week to supplement your income? Can you ask for more hours at work? Use this income minus transportation costs to go straight into your emergency fund.
By taking these actions, I was able to start my own savings account when I was living on less than $26,000 a year in Toronto. It can be done. When there is a will there is a way. Let me know what are you doing to ensure you have an emergency fund?