How to Save for Emergencies When You Have Bad Credit

How to Save for Emergencies When You Have Bad Credit
GUIDE
Mike Randall
By: Mike Randall
Posted: July 12, 2013
BadCredit.org's popular "How-To" series is for those who seek to improve, rebuild or better understand their subprime credit rating.

Having bad credit makes so many day-to-day things harder and more expensive. You pay more for car insurance and interest payments on loans. Even the cost of your mobile phone plan can be affected.

So how do you even begin to think about saving for an emergency when you have bad credit? Well, the real question is how can you NOT do it?

Emergency situations never come at convenient times — heck, that’s why they’re called emergencies.

If you don’t have enough money to deal with the situation, you risk falling even further in the hole. But by planning and saving, even a little bit each month, you can stick money aside that will help out in case an emergency arises.

Here are a few ideas for how to do this:

1. One of the best ways to save money is to not spend it.

Look at ways you can save on daily expenses like eating out, buying that large cappuccino or splurging on new shoes. If this seems like too much of a sacrifice for you, consider the alternative.

2. Working to improve your credit score.

Even small improvements can have a big impact on what you pay out each month in interest charges and other related expenses.

Take a close look at your credit report and challenge any charges you don’t recognize. Some sources say nearly 20 percent of items on a credit report are inaccurate.

“With all the coupons available, there’s no

excuse for spending more than you have to.”

3. Pay your bills on time.

I know it can be difficult to balance all of the payments you have, but if you’re late, you end up paying fees and charges you otherwise wouldn’t have to. These can really begin to add up if you’re not careful.

Instead, make a payment schedule and stick to it. You’ll be surprised at how much you can actually save this way.

4. Never pay full price for something.

With all of the coupons and savings that are available either online or in store advertisements, there’s no excuse for spending more than you have to.

Also, don’t charge things you can otherwise pay cash for. In fact, if you don’t have the cash, you can probably wait to make the purchase.

5. Selling items.

If you’re looking for “extra” money to put aside each month, consider having a garage sale or selling items online.

Everyone is looking for bargains and for things that still have life left in them. Look around your house and garage – I’ll bet you can find enough things you aren’t using anymore to make a sale worthwhile.

Be creative about saving money, and maybe even make a game out of it. Enlist the help of your family in finding ways to save.

The more money you keep each month, the more you’ll be able to put away in your emergency fund. And make sure you don’t use your emergency savings for anything but an emergency.

You can even consider putting it in a lockbox and keeping the key somewhere else – safely of course.

By being resourceful and creative, you can soon have enough saved for an emergency, even if you do have bad credit. And for more tips and suggestions about credit, finances and saving, check back here often. Here’s to your good financial health!

Photo source: bestfinancenetwork.com.