If your job is in risk, your debts are high and getting higher, and you don’t have an emergency fund - enough to cover at least 2 months’ expenses. Consider Extreme savings! Extreme savings involve more than just smart shopping and expenses, cut your monthly expenses down to the bone.
It’s indeed painful to achieve extreme savings, you must remember: it’s a way to gain control over your finances. You won’t have to do it forever.
Think about your absolute essentials are:
- Food
- Shelter
- Medical expenses
- Health
- Insurance Premium
- Electricity
- Transportation
Extreme savings call for extreme measures. Add up what the bare essentials cost you each moth, plus payments for credit card and other debt. Cut out everything else.
Think about cutting out this:
- no cable TV
- no Internet access (unless you need it to make part or all of your income)
- no DVD rentals
- no eating out
- no new clothes.
- watch TV at a friend’s house
- use the Internet and borrow DVDs from your public library.
Again, remember: it’s not forever. Extreme savings are necessary in tough times, but tough times come and go. You’ll make it. What’s more relaxing, having dinner and drinks at a restaurant or knowing you can pay the mortgage this month?
Extreme savings is indeed a quest, the next step to fulfill: try to trim anything from those absolute essentials. Here are some of the things you have to consider to turn your extreme savings into action:
- How much would you save on groceries if you substituted store brands for name brands, used coupons, looked for weekly specials, and cut out junk food entirely?
- How nice is your student loan company?
- Can you get on budget payment plans with your gas and electric companies?
- Can you reduce the number of long-distance calls you make? If you have a cell phone plan you can’t get out of, why not get rid of your landline and use the cell as your primary phone?
- Does your city have adequate public transportation that gets you to and from work and allows you to give your car a rest?
Extreme savings is a good start that would allow you to start an emergency fund. Open an account at a different bank, seal the ATM card in an envelope with ‘For Emergencies ONLY’ noted on it, and hide the envelope in a safe place at home. Just thinking about your growing emergency fund should make it easier to sleep at night.
Extreme savings plan in action won’t be easy, but you’ll start to see rewards soon.
