Saturday, February 13, 2010

Little Nest Egg Here; Little Nest Egg There

Even when we - many people today - feel like we're scraping bottom in the financial bucket, even when all around us are losing theirs; even so, if we have a little bit, we can diversify that little bit. I'm not necessarily talking about a little bit in stocks and bonds, real estate or CD's; gold or silver; or retirement funds. Of course, those things are great when we have them!

But what I'm talking about here is diversifying in what might seem like wee, very small matters.

For some of us, it seems to make sense to have money in more than one checking account and maybe even in more than one bank. Since my husband and I both have jobs (although mine is just part-time), we are able to have two free checking accounts in two different banks by using automatic deposits.

I've always liked the concept of having more than one bank or at the least more than one bank account. Suppose that I accidentally (physically) destroy my debit card (it has happened), or someone steals the debit card numbers and the account has to be closed (it has happened to a family member). It's nice to be able to use the "other account" while resolving the issue.

Keeping some cash in our wallets is another way to diversify. Much as I hate to admit it, there are times when I do not have any cash on me...because times have changed. My mom always told me to keep a dime to make a phone call. Later I used to be sure to keep three dollars to buy gas from AAA if I ran out. Now we have cell phones and we buy the deluxe AAA membership that would supply a small amount of gas if we ran out.

But what about the one time when I run out of the house without my cell phone? (Okay, it's been more than once, though I don't forget it often!). Pay phones still exist, even though they are few and far between. And what if you don't have the AAA deluxe membership...or you can just make it to the gas station, but their credit card machine is down? That little bit of cash in the wallet can be mighty helpful.

What about keeping money at home? To me, this brings great peace of mind. I would never presume to tell you how much I think anyone should keep. At times, my home stash has been as little twenty dollars, enough to pay the neighboring teen to mow the grass when our lawn mower broke down. I think how much you keep depends on a lot of circumstances.

Another thing I would not try to tell you (especially publicly) is where to hide money in your home. But let's try to avoid the most obvious places. I read recently that thieves do look for valuables in the sock drawer. Dang. Had to find a new hiding place.

Another place to keep money, of course, is in a simple savings account (how old fashioned). By building an emergency fund, we won't have to run to the credit cards when something unexpected occurs...for those who still have credit cards. For those who do not, it might mean the difference between a car repair or walking...or juggling rides.

A friend recently told me that she's been listening to me and has started building an emergency fund. Then she laughed and said, but she thinks of it more as a vacation fund. I smiled and told her if she can take a vacation on cash, rather than using credit, it's all good.

As Trent says in The Simple Dollar, even buying food in bulk is a way of diversifying. I've often read of people living off the food in their pantry for a week or even a month, while they pay for an emergency that arises. Yes, real people actually do this. I have not been one of them, but having a little extra food stashed away has saved me making a last-minute trip to the store (or a ruined dinner), when I found out I was missing a crucial ingredient.

What if you don't have the space for a pantry? Any place in the house (or apartment) can be used for storing canned a closet, under a bed or sofa. For ease of use, a plastic under-bed storage box or two might be helpful as an alternate small, but useful "pantry".

Can you share other ways to diversify in the little things?


Anonymous said...

Work more than one job (if you can) or have more than one source of income. If you lose one, you'll still have a little money coming in. Something my mother taught not impulse buy. That "extra" money added up over time can be quite a bit. If nothing else, it can put gas in your tank. If you use credit regularly, just don't. Unless you're paying it off every month, you are digging yourself a financial grave. And one other thing...never leave home without your cell phone, Mom!

Mary Bennett said...

I am so glad to have found your blog, and I hope that you will visit mine too.
I remember when we were first married, our income would fall drastically from about Nov/Dec to about march/April. After our first really awful winter, I learned. During the good months, I would always buy extra: soap (Ivory bar because you can use it to wash dishes, wash your hair,and bathe), coffee, dried milk, rice, cans of soup etc. And when there was buy one, get one free, I'd do those too. Many, many was thetime that me acting like a squirrel helped us during the lean months: like when money needed to go for heating oil instead of food.