Five Quick Ways to Build a Cash Reserve

Having a cash reserve is critical to your financial success.  A cash reserve keeps you from relying on credit cards when you have an emergency and going back into or further into debt.  Remember, the goal is to not only get out of debt but to also stay out of debt.  Initially, I would aim at saving up $2,000.  So here are 5 ways to build this reserve quickly:

1. Sell something you don’t need.
2. Switch your cash value life insurance policy to a term life policy.  Move the cash you get back into your emergency account.
3. Find one area in your daily spending (i.e., vending machine purchases, having coffee out, etc.) that you can stop temporarily and save that money in your cash reserve fund.
4. Temporarily stop your retirement contributions and that money redirected by direct deposit into your cash reserve account instead.
5. If you receive a tax refund each year, increase your federal tax deductions at work and bring home more each pay period.  Use the extra to build a cash reserve first.  [Warning:  Be sure you don't raise the deductions to a point that you will owe at the end of the year.]