Got $ 0 in your savings? Here’s what to do first

There’s a reason we’re all supposed to have a healthy savings account balance: you never know when unforeseen expenses might arise. Or, you could lose your job and need money to cover your bills until you find a new one. In fact, as a general rule, it’s a good idea to have an emergency fund with enough money to pay for three to six months of essential living expenses. But what if you’re nowhere near?

A lot of people find it difficult to save. Many find that the circumstances of life make it almost impossible to put money in the bank. This is especially true if you are struggling with limited income and find that your basic expenses are eating into your monthly salary.

But having $ 0 in savings puts you at risk of debt, damage to your credit rating, and leaves you with no safety net. This is why it is important that you try to build up some cash reserves over time. Here are a few ways to get started.

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1. See if there are any expenses you can reduce

If you don’t have a lot of income and pay most of the essentials, cutting back on spending might seem like an unreasonable request. But it’s always worth looking at your spending and seeing if there is all leeway – even if it’s just a few dollars here and there. Start by establishing a detailed budget that lists your various expenses, from rent to food to utilities. That way, you’ll see exactly where your money is going month after month, and you might see opportunities for cost savings.

For example, suppose you typically spend $ 300 a month on groceries. Hunting for sales and cutting coupons could help you reduce that total to $ 280. And make no mistake about it: saving $ 20 a month is way better than saving nothing at all.

2. Check if you are eligible for government assistance

If you’re constantly maximizing your paychecks with essential expenses and not spending frivolously, you may need some outside help – and there’s no shame in that.

There are several types of government benefits you may be entitled to, depending on your income and the size of your household. SNAP, for example, will help cover your food costs, so it’s worth seeing if you fall into the income limits to qualify. You can also seek help with your utility bills through the Low Income Home Energy Assistance Program (LIHEAP). Your best bet in this regard is to use the LIHEAP database to contact your local office for details. Finally, it’s worth seeing if you qualify for a rental assistance program.

If you are eligible for state aid, you may then be able to free up some money to put in savings. Then you would have a cushion for those times when additional expenses are weighing you down.

3. Look for a second source of income

You may be currently underemployed and struggling to increase your income. If so, see if you can build a stronger income by finding a second job. You can try doing a few shifts at a local business or see if there is any work you can do more independently. The latter option may be more feasible if you have children to care for. For example, doing medical billing for 10 hours a week from home may be a better solution than working two nights a week if you had to pay for a babysitter. That way, you wouldn’t lose part of your income to pay for child care.

Don’t lose hope of saving money

A lot of people don’t have any money in savings, so if this is your situation, rest assured that you are not alone. The key, however, is to take steps to slowly but steadily build up cash reserves so that you aren’t left embarrassed or forced into debt when unforeseen bills hit you.

Remember, you don’t have to build a strong emergency fund overnight. In fact, it can take years to save enough to cover three full months of bills. But if you manage to save some short-term amount of money, you will have even more protection against the many unknowns in life.

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