Nobody wants to get a notification from a debt collection agency that they have an outstanding debt, even if it’s from an amazing debt collection company such as FIRMS (we’re a little bias).  Nonetheless, we at FIRMS have written a post to help you plan for your financial future and avoid falling into unnecessary debt.

Life can bring a variety of uncertain twists and turns and without being properly prepared for those funny little bumps in the road  we can find ourselves struggling to financially handle them.  When life brings those twists and turns and we are unable to financially pay for them, we can begin a life of debt in order to cover our unexpected bills.  However, establishing a proper savings account can help us avoid going into unnecessary debt and can keep us financially liquid and stable for the rest of our lives.

There are 4 main twists and turns that can cause us to go into debt if we are not prepared.

1. Unexpected Medical Bills.
2. Sudden loss in employment.
3. Significant life changes.
4. Divorce.

Most of these financial hiccups can be handled without being forced into debt if we are properly prepared and we can properly prepare by simply saving money.  Some experts suggest having three months of expenses in your checking account at any given time along with having a separate emergency fund in order to be adequately prepared.

If you don’t have any form of savings for those emergencies and unexpected financial burdens in life, we suggest starting with a basic emergency fund where you will save $1,000.  Saving an initial $1,000 is important because it will help you focus on putting money away and it won’t make the process of saving seem so daunting.

Once you have your initial $1,000 emergency fund saved you can begin setting more money aside to build your main fund of having two-three months of expenses saved and available, should you experience a sudden financial burden.

We have 5 top ways to start saving money today.

1. Set a budget…AND STICK TO IT.  Don’t allow yourself to deviate from your budget once it’s set.
2. Don’t stress spend.  Most of us tend to make little purchases whenever we want to or when things get stressful but those purchases can add up fast!
3. Eat out less and cook more.  Going out to restaurants for your meals can get expensive, especially if you’re doing it more than once a day.  Start cooking your meals at home, it will save money and bring your family closer together too.
4. Save anything and everything.  You found an extra $3 in the laundry?  Put in your savings account instead of spending it.  No matter how big or small the amount is, put it in your savings account, you’ll be amazed how fast your savings account can reach your goal.
5. Wait 30 days before making a significant, non-essential purchase.  Thinking of buying that new $60 video game?  Wait 30-days.  You’re less likely to make those insignificant purchases after 30 days and those $60 video games can add up fast and keep you from reaching your savings goals.

Saving money for unexpected life events and bills can be fun and easy when you put your mind to it.  Don’t be intimidated by the number you need to save, start saving now and you’ll be surprised at how quickly you reach your goals.  Your future self will thank you for it.

• FIRMS.