Student loans!! Mortgage payments!! Credit card bills!! All of these payments create anxiety and irritation but they are all real. They are payments we keep in mind when we budget for the month. Then suddenly, an emergency occurs, be it small or large. Are you as prepared as you should be to spend those extra dollars?

With many Americans now living from paycheck to paycheck, emergencies can and often do send your whole financial situation into a whirlwind. Your car needs new brakes, your doctor's visit required some or more medication, the kids need new shoes, and the list goes on and on. So what's the answer?

Be very careful of placing unexpected expenses on your credit card. Using your plastic is not too bad as long as you have a no or low interest rate card, but the typical credit card now consists of an 18% interest rate charge. If you are unable to pay it off in full that 18% can really hurt you later.

Homeowners often bail themselves out by using their home equity. This can in the end turn out to be a very expensive solution to your problem. You really should try to stay away from your 401(k) as well because 401(k) money is pretaxed which means the government has not taken its cut yet. When you use this money as a loan i.e. you pay it back you will have to pay taxes.

So what is the real solution to this problem ? You must stop procrastinating now and start building an emergency fund. Your goal over the first year should be to build up a fund that would support you for 2 months. This is a lot easier than you think! You can begin to build your emergency fund by getting into the habit of transferring a small amount of money into a savings account every two weeks.

For most Americans, an emergency fund of $5000 would meet this goal. Before you all fall out of your chairs laughing or throw your hands up in the air with excuses like I can't afford that lets get real, it's only $100 every week for 50 weeks.

Saving is a state of mind. Once you get into it, it becomes very easy. There are a number of very simple ways to reach your savings goal. I recently called my cable supplier and got them to agree to put me on a special six month deal they were giving new customers - the savings per month was $60. Changing over your home phone to an unlimited VOIP (voice over IP) service can save as much as $50 per month. Taking lunch to work 3 days a week can save another $100 every month. Cut back on those coffee shop drinks. Cutting back from 2 a day to 1 a day could save another $100 per month. The biggest savings can be made on your grocery bills. I found a great way to cut my grocery bill by as much as 50% or more and it works. I even still get to buy all my normal brand name products by just using coupons and buying the right way. Using the iCanShop4Less system, I have been able to save over $125 every week without cutting back on what we buy.

The only person who can change your life is you, and it's much easier than you think. All you need to do is take action and stop procrastinating. You really can stop those emergency blues with an emergency fund.

Have an opinion or a question you would like me to answer, then write me! http://www.CarlHampton.com

Your Money Matters By Carl Hampton
From the Author of From Credit Despair To Credit Millionaire