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How to Prepare an Emergency Fund

Watch more How to Manage Your Money videos: Subscribe to Howcast's YouTube Channel - Prepare an emergency fund now so that you're ready for any unexpected expenses or financial hardships. Howcast uploads the highest quality how-to videos daily! Be sure to check out our playlists for guides that interest you: Subscribe to Howcast's other YouTube Channels: Howcast Health Channel - Howcast Video Games Channel - Howcast Tech Channel - Howcast Food Channel - Howcast Arts & Recreation Channel - Howcast Sports & Fitness Channel - Howcast Personal Care & Style Channel - Howcast empowers people with engaging, useful how-to information wherever, whenever they need to know how. Emphasizing high-quality instructional videos, Howcast brings you experts who provide accurate information in easy-to-follow tutorials on everything from makeup, hairstyling, nail art design, and soccer to parkour, skateboarding, dancing, kissing, and much, much more. Step 1: Boost your take-home pay Increase your take-home pay by reducing or temporarily suspending your 401K contributions and any other voluntary paycheck deductions. If you usually get a tax refund, ask your employer to reduce the taxes taken out of your paycheck. Resume your 401K contributions as soon as you can. Step 2: Increase deductibles Lower insurance costs by increasing the deductible -- the amount you pay out of pocket before your insurance kicks in. Higher deductibles mean lower monthly premiums. Step 3: Sell what you don't need Sell possessions you can live without on eBay, through online classified ads such as Craigslist, or at a yard sale. Step 4: Open a savings account Put the proceeds of your cash-generating measures into the highest-yielding interest account you can find that does not penalize you for early withdrawal. Tip Online savings banks usually offer the best rates. Step 5: Divert money into savings Set up an automatic deduction from your paycheck that goes directly into your savings account. Step 6: Earn more Earn some extra money with part-time work. Maybe a local merchant could use an extra pair of hands over a holiday. Or perhaps there's a resort area nearby that hires part-time seasonal help. Babysitting and yard work are also effective standbys. Step 7: Hands off! Keep your hands off the money unless you have a true emergency. Did You Know? After saving for 34 years, retiree Eugene Sukie cashed in 28,000 rolls of pennies for $14,000.
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