The traditional rule-of-thumb for emergency funds is to have enough cash stashed away to cover 3 to 6 months’ worth of expenses. For many people, though, this sounds better in theory than in practice.
When you’re starting from scratch and don’t have a lot — or any — extra cash at the end of the month, consider these ideas to help grow your emergency fund.
Cutting Expenses
Review recent statements to find opportunities to save. Look over your bank statements and credit card bills from the last few months to see where all your income is going. Spend some time tallying up expenses in categories you have some control over, such as entertainment, dining out, clothing and online shopping.
Cut down on lifestyle expenses. Identify areas to cut your spending and create new spending goals in categories that were problematic in previous months. Some of the easiest places to cut include online shopping, subscription services, clothing, movies and music. Once you reach your emergency fund goal, you can consider adding some of these spending areas back into your budget.
Spend less on food. One of the biggest budget busters for many families is their spending on food — both at the grocery store and at restaurants. Control food spending by making a meal plan and cooking most of your meals at home, shopping sales at the supermarket, and making meals with ingredients you already have.
Increasing Income
Squirrel away windfalls. Consider adding windfalls such as tax refunds, work bonuses, or annual gifts you may receive from a family member to your emergency savings as soon as you receive it.
Sell stuff you don’t need. Look around your home for items you rarely use and then sell unwanted stuff using an online marketplace. Used items that can fetch a good sales price include workout equipment, brand name clothing and accessories, small furniture and antiques.
Add a part-time job or side hustle. Boost your income by picking up more shifts at work, asking for overtime, or getting a second job or side gig to fill your spare time. This step can help you bring more money home so you can add to your emergency fund.
Once you start looking for ways to spend less and earn more, there’s one final step that can help you grow your emergency fund. Make sure the money you find on both ends of the spectrum makes its way to your savings, either through manual or automatic transfers.
The best way to do this is by having a dedicated emergency fund in an account that’s separate from your regular checking and savings accounts. By moving your extra money into this account, you can grow your emergency fund with less temptation to spend it.
The idea of building a personal brand might seem intimidating, but the benefits can be career altering. Not only does your brand promote you to the entire market, it solidifies your standing within your network where most new career opportunities come from. Here are some steps to consider for building a brand that promotes your strengths and showcases your value.
Do a personal evaluation. Start by reflecting on your personal and career experiences. Write down a list of traits and accomplishments that are good portrayals of the value you bring to people and organizations. Ask yourself questions such as, “How would others describe me?” or “In what situations would people look to me for help?” Also take an inventory of your social network presence. You can even try googling yourself to see what comes up. Understanding the current state of your brand, both online and offline, is imperative before taking the next step.
Be authentic. As you do your self-evaluation, the shape of your persona will start to emerge. Maybe you’re a go-to person for complex problems, or someone people confide in for advice, or a trusted leader that isn’t afraid of making the big decision. Odds are you’re a combination of a lot of different things, but try to nail down the main ideas so you can narrow your focus. The key here is to be authentic and genuine. There’s no sense building a brand based on something that you’re not — this only causes problems for you and everyone around you.
Build your online profile. More than ever, people and businesses are looking to learn about you by researching online. You should try to match your online profile to your in-person qualities. This comes more naturally to some than others, but even some simple steps can enhance your online persona. Start by choosing a profile picture that displays who you are in the best possible light. On LinkedIn, for example, your career industry will dictate the style you choose. This photo will be your first impression, so make sure it conveys the look you are going for.
Engage and network. Networking is extremely important to your brand. A LinkedIn study shows that 85% of professionals believe networking is important for finding your next role, while 70% of job changes happen because of a connection at the new company. To increase your online presence, consider posting on a consistent basis. You can start simple by sharing an article you thought was interesting. Then take it a step further by sharing a story that taught you something. The more you do it, the more comfortable you’ll be, and the more that your authentic personality will start to show.
Tell your story. Don’t be afraid to share things about your personality and experiences that helped shape who you are as a person. This will draw people to you and start to build trust. And you don’t have to get deeply personal…even the smallest little details about something unique about your day or an experience can make you more interesting.
Building a brand is a lifelong process, so keep at it and don’t be afraid to evolve as you go and learn. And who knows, you might even learn something about yourself in the process.
While your credit score is a three-digit number that’s automatically assigned to you, this is one area of your financial life where you have quite a bit of control. The moves you make or don’t make with your credit can help determine where this score falls at any time, and the impact can be dramatic.
Where good credit, a score of 670 or higher, can mean having access to financing with the best rates and terms, a low credit score can mean paying higher interest rates and more loan fees — or even being denied financing altogether. Bad credit can also mean having trouble getting an apartment or a job if your employer asks to see your credit report for hiring purposes.
The following steps can help you improve your credit this year and beyond:
Set up bills for automatic payments. Because your payment history is the most important factor used to determine credit scores, make every effort to pay bills on time. Set up your bills for automatic payments so they’re paid no matter what, and you can avoid unnecessary credit score damage.
Pay down existing debt. How much you owe in relation to your credit limits is the second most important factor used for credit scores. This means avoiding carrying a balance on your credit cards and never using more than 25% of your credit line or your credit score could be impacted.
Look over your credit reports for errors. Check your credit reports from all three credit bureaus — Experian, Equifax and TransUnion. You can do this once a year for free at AnnualCreditReport.com. If you find any errors or information you don’t recognize, take steps to dispute this information with the credit bureaus.
Build credit with new financial products. If you need to build credit from scratch or repair credit after mistakes made in the past, look for new credit products that are easy to obtain. Your best options are secured credit cards that require a cash deposit as collateral and credit-builder loans.
Use a free app to build credit. You can use a free app like Experian Boost to get credit for payments you’re already making like utility bills, subscription services and even your rent. All you have to do is connect your accounts to this app to have your payments reported to the credit bureaus.
You don’t have to live with a low credit score for another year, especially since so many things can help you improve it. By never missing a payment, paying down debt, checking over your credit reports and getting creative when it comes to building new credit, you can end 2024 in much better shape.
Like a bundle of sticks, good business partners support each other and are less likely to crack under strain together than on their own. In fact, companies with multiple owners have a stronger chance of surviving their first five years than sole proprietorships, according to U.S. Small Business Administration data.
Yet sole proprietorships are more common than partnerships, making up more than 70 percent of all businesses. That’s because while good partnerships are strong, they can be a challenge to successfully get off the ground. Here are some of the ingredients that good business partnerships require:
A shared vision. Business partnerships need a shared vision. If there are differences in vision, make an honest effort to find common ground. If you want to start a restaurant, and your partner envisions a fine dining experience with French cuisine while you want an American bistro, you’re going to be disagreeing over everything from pricing and marketing to hiring and décor.
Compatible strengths. Different people bring different skills and personalities to a business. There is no stronger glue to hold a business partnership together than when partners need and rely on each other’s abilities. Suppose one person is great at accounting and inventory management, and another is a natural at sales and marketing. Each is free to focus on what they are good at and can appreciate that their partner will pick up the slack in the areas where they are weak.
Defined roles and limitations. Before going into business, outline who will have what responsibilities. Agree on which things need consensus and which do not. Having this understanding up front will help resolve future disagreements. Outlining the limits of each person’s role not only avoids conflict, it also identifies where you need to hire outside expertise to fill a skill gap in your partnership.
A conflict resolution strategy. Conflict is bound to arise even if the fundamentals of your partnership are strong. Set up a routine for resolving conflicts. Start with a schedule for frequent communication between partners. Allow each person to discuss issues without judgment. If compromise is still difficult after a discussion, it helps to have someone who can be a neutral arbiter, such as a trusted employee or consultant.
A goal-setting system. Create a system to set individual goals as well as business goals. Regularly meet together and set your goals, the steps needed to achieve them, who needs to take the next action step, and the expected date of completion.
An exit strategy. It’s often easier to get into business with a partner than to exit when it isn’t working out. Create a buy-sell agreement at the start of your business relationship that outlines how you’ll exit the business and create a fair valuation system to pay the exiting owner. Neither the selling partner nor the buying partner want to feel taken advantage of during an ownership transition.
Bartering, the act of trading goods or services with other goods or services instead of money, is more popular than ever. And with many businesses dealing with constrained cash flow, bartering may be a good way to create value for your business.
The new world of bartering
Bartering traditionally worked something like this: You know someone who has something you need and you have something they need. You talk, figure out comparable value and make the swap. Everybody’s happy. But other than blind luck, finding a match to barter with was very difficult.
But with online platforms, bartering is now easier than ever with the creation of posting sites and exchanges. Posting sites provide a platform where businesses can skim for or post items they are looking to acquire or trade. These are usually free and unmonitored, so surf at your own risk. Bartering exchanges offer a marketplace and bartering credits that act as a middleman. You can trade goods and services and receive credit that you can use towards acquiring a different good or service. These tend to be actively managed and typically charge a monthly membership fee.
Remember, most bartering can create a taxable event. If you receive something of greater value or trade a deductible expense for a non-deductible expense, the difference is taxable income and needs to be reported on your tax return — so careful record keeping is very important.
When bartering can help
You have a unique need with no available resources. Identify what you do well and look at your income statement to identify services you typically must pay for yourself. For example, consider a photographer who is paying a monthly tech support bill to administer their website. That photographer could reach out to the web development company to see if they need photos for their website services or other marketing material. They then barter their photography for coding expertise. It saves each party the necessary cash to purchase these services.
You need to offload aging inventory. As inventory ages, decisions need to be made. Letting it sit can take up valuable space and paying to dispose of it is usually not the most efficient practice. There might be a business that has the same issue, but with something you can use. Take some time to think about the type of businesses that might find your old inventory useful.
You have customers who can’t pay. Use bartering as a method for collecting from customers who can’t pay your invoice. Instead of sending an account to collections, consider whether your customer has something of value your business could use. Even if your customer doesn’t have anything of direct value for your business, you might be able to accept an asset and then sell it online to settle your outstanding bill.
Finding bartering partners can often have long-term benefits without having to dip into cash reserves. And if structured correctly, the service provided can offset the expense of the service received.
Cross-training to ensure more than one person knows key functional areas can be a win-win situation for you and your employees. Large companies often use it to prepare managers for future promotions. But in small companies, cross-training can be a great way to mitigate risk.
How you implement cross-training will depend on the size and nature of your business. Consider prioritizing the departments that need and/or want cross-training the most. These departments may be understaffed or have many new employees. Look for important functions that are currently dependent on a single person’s knowledge. These areas should be a focus of your cross-training program.
As you implement a cross-training program, here are a few tips to help you along the way:
Document your key processes. You cannot cross-train if you don’t know the process. These written processes will turn into training documents as you implement your program. So your first step is identifying key processes and procedures and having your current people that are doing these functions to get them down on paper or documented through short videos.
Communicate to your team. Get everyone in step before starting a cross-training program. Help your team understand why the company is cross-training your team. Reasons may be to prepare for organizational growth or new industry standards, to cover functions when someone is on vacation, or to adjust to a changing structure that’s focused around roles and responsibilities. Then continue to communicate with your team throughout the process with status updates and next steps.
Present cross-training as an opportunity. Your employees may be more resistant to cross-training if it feels like it’s an obligation or a threat to their roles. You can help them feel motivated by highlighting the benefits, like developing different skill sets and having a better understanding of how their contributions positively impact other parts of the business.
Start with a small pilot program. Test the waters with a select group of employees to get a better understanding of what works and what needs to be tweaked. You can then expand the program later as you gain insight and experience.
Determine cross-training hours. Figure out how much time can be dedicated to cross-training for each team to still run efficiently. This may include setting aside a few hours each day, or setting aside full days for a certain period of time to focus on cross-training. If your business is seasonal, ramp up cross-training during your low seasonal period.
Listen to feedback. You may learn that some employees have already started cross-training on their own. You can use this kind of valuable feedback to fine-tune your official cross-training program.
Keep in mind that some employees may resist having to train others, and productivity may suffer in the short-term. But remember the cost of not cross-training – if you lose a key employee and no one else knows how to do their tasks, your business may have trouble finding a replacement.
