Are you financially fragile? Would you be able to come up with, say $2,000, if you suddenly had to repair your car or fix a leaky roof? If you answered no, you're not alone. Nearly half of Americans say they'd more than likely have a hard time coming up with a couple thousand dollars for unexpected costs, according to a study by the National Bureau of Economic Research.
Beyond that $2,000, it's important to accumulate at least an eight- or nine-month rainy day liquid account, enough to pay your bills and maintain the roof over your head, in case of the unexpected. After all, the average length of unemployment in the U.S. now stands at 38 weeks, or roughly nine months.
Easier said than done, of course. Beyond the traditional advice of "save automatically" and "cut spending," consider these out-of-the-box ways to boost your personal cash reserve to ensure you never fall short on a rainy day.
Keep the Bills — Not Just the Change
At the end of the day, get in the routine of taking your dollar bills out of your wallet and storing them in your own personal piggy bank, or any device where you can't very easily retrieve your money. At just two bucks a day, that stash can easily grow to $700 by the end of the year.
Open a Hard-to-Reach Savings Account
In addition to an instant access savings account, try opening a separate savings account that isn't linked to a checking account. This way, you won't be able to access the account via an ATM. If you want to make withdrawals, you may have to visit your local bank — which adds an inconvenient step. Short-term certificates of deposit or CDs, which encourage you to keep your money in the account until a maturity date, are helpful for the same reason. Because your cash won't be as easy to access, it'll be relatively safe from any impulse spending.
Pay yourself every time you do something worthy of reward. For example, when you do a service you'd ordinarily pay someone else for, such as laundry, salon services or cleaning your house — tip yourself, anywhere from $5 to $10. You'll save not only what you would have spent on the service, but also a bonus for doing it yourself. Doing your own bimonthly manicure and pedicure, for example, could save you $60 a month. Tip yourself $10 each time, and you can save yourself close to $1,000 a year.
Save the Savings
Finally, while it feels great to buy that dress on sale for $50 after you budgeted to pay $100, you're not really saving unless you bank the difference, right? Instead of spending the savings on the pair of dress shoes to match, benefit from the sale by actually putting that money away. How? Hop online immediately when you arrive home and shift that savings from your checking account into a savings account.
To help keep track of the things you don't buy, try a free service like PiggyMojo.com. Just text PiggyMojo or send it free, direct message via Twitter each time you avoid spending money on things you don't need (but want). It keeps track of all the money that you're theoretically saving. The average savings for a PiggyMojo user is about $15 per "save," according to the company.