By BankingMyWay.com Staff
Starting an emergency fund to protect your financial situation in case you lose your job or encounter other unexpected expenses is more important than ever in today’s economy.

Unfortunately, if you are not in the habit of saving, getting started can be a challenging barrier.

Regularly siphoning money from your disposable income can feel very restrictive in the beginning. However, once you get over the initial hump and become accustomed to “paying yourself,” saving gets easier.

To start socking money away for emergencies without feeling like you’re depriving yourself, here are some tricks you can try using:

Be Your Own IRS

Do you get a tax refund every year? If so, you’re effectively giving the federal government an interest-free loan. You may enjoy getting a hefty check each spring, but if you adjust your tax withholdings, you can get a higher paycheck every month. Use the IRS Tax Withholding Calculator as a guide to determine how many more allowances you should take, then give your employer a new W-4 form. When you get your next paycheck, setup an automatic transfer for the extra amount to go directly to an interest-bearing emergency savings account. In the end, you’ll end up with more money than your typical refund because you’ll have been earning interest and the money will be liquid for emergencies.

Save the Money You Save

Prices for many items have gone down in the last year. One of the most glaring examples is gas. Last summer gas prices were over $4 a gallon. Now, the national average is hovering around $2 a gallon. Rather than taking the money you save and frittering it away on more spending, act as if you are still paying the high prices and bank the difference in your emergency savings fund. For example, if you used to pay $150 to fill up your gas tank each month and now pay $75, set up an automatic transfer from your checking account to your savings for the difference each month. You will see the same amount of available cash in your checking account that you did when you were paying higher gas prices, but you will be building up your savings. The same can be done with other expenses like groceries. Look at your grocery receipts to see how much you save by using coupons or loyalty cards, and transfer that amount to your savings account.

Make a “Found Money” Fund

“Found money” is any money you didn’t expect to have like rebates from purchases, refunds from returned items, gifted money, won money, bonuses and even money you find in the laundry. Any cash or check you receive that isn’t your regular paycheck could easily be deposited directly into our emergency fund. If you didn’t expect to receive it, then you should not miss it in your checking account.

Whatever strategy you use to begin an emergency savings fund, even if it’s just putting your change in a piggy bank, consistency is key. The more savings becomes habitual, the more likely you are to continue it for a lifetime.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.