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Financial Literacy - Emergency fund
Making money real to you
Use these tips to translate your financial plans from abstract concepts into concrete routines.
Creating an emergency fund

Making your money real

We live in an age where you may rarely see your money. Paychecks get directly deposited to checking accounts where automated bill pay functions whisk large chunks of it away to pay bills in faraway states. You use a piece of plastic for paying gas and another for shopping at the mall. You use a debit card for groceries and receive an alert on your phone when your funds are getting low, but it's just all numbers flickering on a monitor. The concept of money is even disappearing from our language. We talk about account balances instead of how much money we have. Under these circumstances, it's easy to lose your connection with money.

For some people, sitting down and figuring out a budget on paper works fine. For others, the association between the squiggles on the screen and dollar bills is more tenuous. If you're having trouble sticking to a savings plan, these tips may help make the concept of money real to you again.

Making your money real
Association game
Figure out one expense that you can do without every once in a while and use that as a gauge to help make your savings tangible. For example, if your goal is to save $40 a month and you know that you spend $4 a day on espresso drinks, you can think of your savings as 10 coffees. This way your savings goal is not just an abstract number, but something specific to tackle. How you save the $40 is up to you, but you can start thinking of how to reach your savings goals in terms of familiar items.

-- Posted: July 23, 2007
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