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I remember the days when I was a struggling student without much income and without much savings. I also had a great deal of debt. If a $500 car repair came up, I had to ask my parents to lend me the money. Now, things are a little more different. I’m more fortunate in that I have savings built up, I’ve paid off the credit card debt from college, and my husband and I are building a retirement nest egg. If I needed to come up with the money for that car repair, or for a $1,000 visit to the emergency room, I could.

Unfortunately, not all Americans are in that position. We all know by now that most Americans wouldn’t be able to handle such an unexpected expense. Are you among that majority here? That’s the wrong crowd to be in.

Where Do You Get Your Emergency Money?

When you run into an unexpected expense, where does the money come from? You could raise money for an unexpected expense by reducing spending in other categories, borrowing from family or friends, or using credit cards, but are these going to be enough?

All of these methods come with their own pain. Using credit cards comes with the most expensive long-term consequences obviously, especially if you can’t pay off the debt quickly. In my case, I used to borrow from my parents. And, truth to tell, if I’m in a sticky cash flow spot, I’ve asked my parents for a little help – and then promptly paid them back.

However, that doesn’t negate the fact that I should be working harder to make sure that I have the money available for emergencies without turning to other sources. It’s also a disappointing commentary on our society that even $1,000 is likely to undo many households.

Can You Handle an Emergency?

Stop a moment and think about whether or not you could handle an unexpected expense. Can you pay the $500 deductible required by your homeowner’s insurance? Would you be able to handle $800 for the purchase of a new refrigerator? If the answer is no, think about making it a goal to build your short-term emergency fund to $1,000 this year.

If you set aside $100 a month, you could meet that goal in 10 months. That’s about $5 every weekday. You can do that by cutting your cable, brown-bagging your lunch, or taking any number of small steps to cut unnecessary expenses.

What If I’m Too Broke to Save?

Do you think that you are too broke to save money? It’s hard, I know. But it’s also an excuse. In fact, I used to be one of the people who insisted that I didn’t have enough money to save.

The truth, though, is that you probably do have enough money to save – at least a little bit. The key is in making it a priority.

Americans Think They Can’t Afford to Save

Every year, many people in the country set a goal to save but plenty doesn’t think they will be able to meet the resolution. Essentially, many Americans are already admitting defeat as soon as they set the goal.

So, why do many Americans feel like they can’t save? The number one reason that consumers say they can’t save always revolves around the thinking that they don’t have sufficient income. The next biggest reason is unemployment. While a case can be made that it’s difficult to save when you are unemployed, the reality is that insufficient income probably isn’t the best reason not to save. Rather than assuming that you don’t have enough money to save, the best thing you can do is to start creating a better habit of savings.

How to Start Saving – Even If You Don’t Have Much Money

So, if you don’t have much money, what can you do to start saving? The important thing is that you just get started. Too often, we get hung up on the idea that we don’t have enough money to start saving. We end up throwing up our hands and doing nothing. I know. I’ve been there. However, it is possible to change your outlook.

In order to start saving, the first step is to identify your expenses. Are you spending on things that you don’t need to spend on? How much money do you waste each month? Be honest about the way you use your money. If you have enough to go out to eat four or five times a month, you can cut back and find a few dollars to set aside.

Build Up by Starting Small

One good way to start is to look for small ways to start saving. Can you set aside $1 a day? What about $5 a day? It doesn’t seem like a lot, but every bit helps, and the idea is to start identifying ways you can either cut your spending or make more money (or do both) so that you can save. It also helps you build a good habit. Make setting aside money a priority, and you’ll be in better shape going forward.

As you get used to saving, you can gradually increase how much you set aside until you are setting aside a more significant amount of money each month.
Don’t get caught by the myth that you are too broke to save. Remember how you’ll get to $1,000 with $5 every weekday? Heck. Even if you only set aside $10 a week, it’s great because you are making progress. You likely need to increase that down the road, but as a starting point, any small amount is better than nothing.