When we talk about Lifetime Wealth staples or foundational principles, an emergency or pinch fund is right up near the top. Basically, a pinch fund is for those unexpected times in life where you find yourself in a ‘pinch’. Like when you spill water on your laptop, you get a flat tire, and the dog rips apart your couch – random, unexpected things! What it isn’t is expenses you know are coming; it is not your car registration, paying off your After Pay account or an anniversary present for your spouse! They should all be figured into your Money Plan.
We recommend between $1-2k (depending on whether you are single or a couple/family). We would be hard-pressed to find someone who is against the idea of having money put away for a rainy day and the peace you get from having a Pinch Fund set aside is priceless! If you already have a Pinch Fund saved up in a separate account, great, this blog isn’t for you (maybe your next step is to focus on building reserves). If you haven’t built up your Pinch Fund or you’re in the process, we have some tips to get this up and running as soon as possible.
This could mean adding a week or two between your regular hair appointment, swap, pause or cancel any running subscriptions that are not essential (streaming services, app’s etc).
Call your insurers, utility providers and lenders and ask for a better rate (they almost always can offer you something better!).
This is a huge one. People often overspend on groceries and this is a great way to save a bit of cash. Try buying in bulk, shop at a discounted grocer or local market, do a single shop for the week, and buy what’s on sale. Also, cook! Try not to eat out or order takeaway and learn how to make some easy new meals. There’s a lot of quality cooking content on the internet, get involved! Try a meal subscription, these could help cut down on grocery costs and wastage.
It’s tax time! Lodge your tax return and use some or all of the money you receive back towards your Pinch Fund. It’s a sure way to achieve your Pinch Fund amount.
If you have a skill (graphic designer, web developer, carpenter etc), try picking up some freelance work. If you work shifts, you can ask for some extra shifts for a while. Have a look for some weekend work.
Download cashback apps like Honey, Shop back and cash rewards that search the internet for coupons and discount codes.
A lot of banks these days offer round-up functionality for your savings accounts. This is a great way to quickly get some funds together without really knowing it!
A super fast way to get some cash together for your Pinch Fund. Have a look through your garage, wardrobe, shed, furniture, whatever! You’d be surprised at what people will buy on Facebook Marketplace and Gumtree, and for a good price. Look for stuff you don’t use anymore, or stuff you don’t need and put it up for sale.
Many of us enjoy eating out, however, the price can add up quickly, so we suggest having a look at your eating out budget to see where you can save. Sticking to BYO restaurants, not ordering the entree, and just having main and dessert are some options. Take advantage of happy hours or have a glass of wine instead of a bottle. Also, reducing the number of times you eat out will quickly generate savings.
These are just a few ways to help you achieve your Pinch Fund goal and tick off one of our fundamental steps. It’s to be expected that while on the journey to building your pinch fund, pinches happen. This can feel demoralising as you creep forward, only to be set back – don’t give up, you’ve got this. With this in place, you won’t have to rely on credit or dip into other savings to get you out of trouble and you can confidently continue on your journey to Lifetime Wealth.