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Where to find the money to build a last minute emergency fund BANKING


Probably for most of your adult life, You heard the urgent advice – save money for an emergency fund.

In general, the goal that may not feel realistic when you live from paycheck to paycheck was to save three to six months. You know if you lose your job or develop a health problem.

Or face a global pandemic.

The novel corona virus, also often referred to as COVID-19, is clearly an economic as well as a health problem. It is currently threatening our health and our financial wellbeing. And probably many of us wish we had one or a larger emergency fund right now.

Still:

If your emergency fund is missing, don’t kick yourself too much. You are hardly alone.

With the last Fed pollIt turned out that 39 percent of Americans would have difficulty paying for a $ 400 emergency. That’s 4 in 10 Americans who take out a payday loan, borrow from friends or family, or don’t have to do anything, reported some of the options reported by reviewers.

So if you are worried about money and want to set up a last minute emergency fund, we have some practical ideas.

And we promise that we won’t get too lame and suggest things like recycling cans or selling farms, which of course would probably not be very well attended at the moment.

1. Reduce the pension contributions

If you saved in a 401 (k) and your IRAs every month, you should now reduce the contributions – and use this money for an emergency fund.

For example, instead of putting away $ 400 a month, enter $ 100. If you’ve retired $ 100, you might be able to get away with $ 50.

If you go this route, you can redirect the money you would have spent on your retirement and send it to a separate online savings account.

Even if the interest you collect is not very high due to falling interest rates, it is at least far less likely that you will spend the money if you separate it from your checking account.

Now:

When you get a 401 (k) matchIt is up to you to determine how much risk you take by choosing not to contribute enough to the game.

These matching contributions are money that you would lose.

Robbing your future to get through the present is a painful idea, but the hope is that you can catch up on payments later in the year.

2. Consolidate debt

If your creditworthiness is healthy and you have unhealthy debt, this may be a good time to consolidate the debt at a lower interest rate.

A popular option is a credit card with 0% credit transfer.

As in, transfer the credit card debt to the new credit card.

Then you avoid interest expenses Reduce your monthly payments, which means you have more money each month to build an emergency fund.

The same applies to personal loans, which may not be subject to the introductory 0% APR offers, but which are low over a much longer period (typically 3 to 5 years).

3. Interrupt the repayment of the student loan

Hopefully this is not news for you, but when the stimulus package was recently passed by Congress, Student loans were suspended until September 30th.

Yes, you can still make your student loan payments if you want, but there is no penalty or interest if you don’t make them.

So if you are a student borrower and you have student loan payments but no emergency fund, provided you are still working and money is flowing in, this is your chance to easily create one over the next few months.

4. Use your tax refund

Although the tax period will be postponed from April 15 to July 15, you should apply for your tax refund as soon as possible, provided you know you are getting one.

With online tax preparation, electronic filing, and direct deposit, you can usually get your money 2 to 3 weeks after filing.

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