You need 500$ in the bank

Having a few hundred bucks at the right times in your life can make all the difference.
Here's how to tuck away money for emergencies, even if you don't have much.
Most of the talk about financial cushions centers on the importance of an emergency fund, that stash of cash that's supposed to equal three to six months' worth of expenses.
A $500 pad is something that just about everyone can scrape together with enough determination.
And it can make a real difference.
Start by keeping an extra $100 in your checking account. If you maintain this pad and resist the urge to spend it, you'll greatly reduce your chances of bouncing a check. If you keep track of your balance online or via an ATM, you'll have to mentally deduct the $100.
Then funnel $400 into your savings account. It may not seem like much, but $400 will cover a good chunk of the real emergencies that come your way, e.g. replacing an appliance that breaks down. Even if the unexpected expense is higher than $400, you'll at least reduce the amount you need to scrape up from other sources.
Then leave it alone unless you're facing a real emergency.
If the spending is absolutely necessary, you're better off paying cash than paying interest on money borrowed from credit cards or payday lenders.
Then you can concentrate on rebuilding your cushion as soon as possible.
The first $500 is the hardest
Eventually, you should try to build your pad of cash into a real emergency fund.
But that can come after you've taken care of more-pressing financial needs, such as paying off high-rate debt and saving for retirement.
Here are some ideas for scraping up the initial $500:
- Your tax refund - The typical refund check is more than $2,000
- Try a "buy nothing" month - many are surprised at the amounts of cash they're saving by buying only necessities for a single month, don't eat out, bring your lunch and snacks to work and avoid shopping for 30 days
- Sell stuff: try yard sales, consignment stores and online auction sites such as eBay, sell your books on Half.com or Amazon.com. Make sure the cash you raise gets put into savings immediately, or it will get spent.
- Save your change. save hundreds over the course of a year, even making a game of it with children.
- Review your bills - If you haven't already, go through your regular bills and see what you can trim. Once you've trimmed, channel the extra savings into your bank account. If you save $10 on your phone bill, for example, put that much into savings each month.
- Make it automatic. Setting up a regular electronic transfer from your checking to your savings account is much better than making the transfers manually. If you have to make the decision to save every month, you'll probably decide to do something else with the money. If the decision is made for you, it's more likely to stick.
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If you've been living paycheck to paycheck for a while, you may be unclear about what constitutes a true emergency.
Essentially, it's an event that puts your livelihood or your family's safety at risk. The television dying, for example, is not an emergency. The furnace dying is.
A car repair may or may not be an emergency, depending on whether you have alternate transportation.
Regular, predictable expenses are not emergencies. Neither are gift-giving occasions like weddings, holidays and birthdays.
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Raises are hard to come by at many jobs this year, so don't wait for the boss to be struck by the sudden realization that you're valuable.
Give yourself a raise by spending less of your hard-earned cash.
Following any one of these tips can save you as much as $500 per year.
If you do all 10, you'll save at least $5,000 a year.
That's a heck of a lot more than the measly 3% increase that your employer is likely to hand out. And the best part about it is that you don't have to smile and say "thank you."
10 suggestions for painless frugality
1. Drive less.
If you have a 25-mile commute, persuading the boss to allow telecommuting one day a week, or squeezing 40 hours of work into four days, will definitely put you ahead about $500 per year.
2. Bring your own stimulant.
Stop buying coffee at the chichi coffee joint down the street from work. Bringing coffee from home in a thermos or brewing it in the break room will actually improve the quality of your morning shot of energy, as well as cut its cost dramatically. You can get 40 cups of coffee from a pound of beans. Even the gourmet ones can be purchased for $4 per pound. If you're spending $2 per day on coffee -- easy to do in most workplaces -- you'll go from spending $500 a year to about $25 by making your own.
Save even more by taking cans of soda or bottled water to work instead of buying them out of the vending machine. Bottled water sells for 14 cents a bottle at a big-box grocery store, and soda is 16 cents a can (less for off-brands). Compare that to the 75 cents or more that you'll spend at the machine, and it's a no-brainer. You can go even further by cleaning your small plastic water bottles and replenishing them with drinking water from a gallon jug. (It's an environmentally friendly move, too.)
3. Conserve energy.
Turn off the TV when you leave the room. Using less energy is a painless way to save. Heat and air conditioning are the largest home-energy hogs.
Switch to U.S. Energy Star-approved light bulbs and save $60 a year. You can also save more than $200 a year just by turning off the TV when nobody's watching it. Running a 32-inch TV four hours a day costs $3 per month, but many families use the TV for background noise, letting it play 24/7. Washing clothes in cold water is good for another $60 a year, and powering down your computer at night saves $70.
4. Dig gardening.
Not only does gardening burn lots of calories, but a nice yard adds value to the house. If you do it all yourself, it's pure profit.
5. Go small or pet-free.
Expect to pay these annual costs of pet ownership: cat, $640; small dog, $780; medium dog, $1,115; large dog, $1,500. Obviously, smaller is cheaper.
6. Don't flush money down the commode.
No-name-brand toilet paper, paper towels, tissues, paper cups, plastic wrap, plastic bags, etc., are all available at half the price of similar name-brand products when you buy them in bulk. You don't even have to wait for a sale. Such stores as Wal-Mart, Kmart, Costco and Sam's Club offer these items all the time at bulk rates.
For instance, you can buy 15,000 sheets of toilet paper for about $15, compared to the 4,224 sheets of the "squeezably soft" variety that routinely sells for $9 in a 12-pack. Big-name plastic wrap is 10 times more expensive than the big-box variety -- 0.04 cents per square foot versus 0.004 cents per square foot. Commercial laundry detergent is 34 cents per pound, versus a small box of familiar-name powder at $2.10 per pound.
Of course, bulk buying requires having some cash on hand, transportation to carry large quantities and enough storage space for these items. If you can manage those basic requirements, buying big can be a tremendous deal and easily cut costs by $500 per year.
7. Limit media.
Who watches 300 channels anyway? The easiest way to cut costs: Just take a deep breath and cancel everything but the basic plan. Most cable companies have a very limited plan for $10 or $15 per month that offers local channels and a few other networks.
If you have greater-than-average do-it-yourself skills, consider installing an antenna and capturing high-definition television signals over the air. . A page on the National Association of Broadcasters' Web site lists the stations you can expect to receive. In most cities, that's all the networks plus PBS.
Next, examine your phone service -- particularly your cell. What kind of user are you? If your phone's for short calls only -- "I'm on my way home now, dear" -- consider a pay-as-you-go plan like Virgin Mobile. It has cool phones, and, for a total of $80 per year, you can make those kinds of calls and have peace of mind. It's a big bargain.
Family plans are another possibility. Nobody checks your DNA, and Sprint Nextel doesn't even require sharers to be in the same area code. Four people on the same plan will cost about $25 each.
8. Sign up for tax-advantaged plans at work.
The possibilities include education, health, transportation and child-care savings accounts.
If you're in the 25% tax bracket, you'll be $500 ahead once you spend $2,000 in pretax dollars on these necessities. If your company doesn't offer these plans, ask for them to be added. It's a cost-free benefit that even the smallest and most cash-strapped employer can offer.
9. Eat in.
Replace one $20 trip per week to McDonald's with a large $7 carryout pizza from any of the billions of cheap pizza places in every city.
Better yet, buy pizza at the grocery store.
10. Don't bank on it.
Pay credit-card bills in full as soon as possible, and take advantage of free bill pay.
The real savings can be had by avoiding credit-card debt and paying off what you've accumulated as quickly as possible.
For instance, if you owe $4,000 on a card charging you 18% interest, and you pay three times the minimum payment every month, or $300, you'll pay off the card in 15 months and spend about $500 in interest. If you spread the cost out and pay $200 per month -- still twice the minimum payment -- you'll pay off the bill in 24 months and pay out $4,800 in total -- $800 in interest. If you can bite the bullet and pay as much as $400 each month, the debt will be gone in less than a year and you'll save between $100 and $700 in interest over the other options.
Saving money doesn't have to take an ugly bite out of your lifestyle. Once you put these strategies in place, you won't feel pinched, because you're not giving up much at all.