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How to Save $1,000 Cash Painlessly

The most important thing you can do to make your personal economy strong is to have an umbrella—an emergency fund with enough money in it to pay all of your bills for six months. And it needs to be safe and secure in a bank account. You read that right—half a year’s income! Wait. You can’t even imagine being able to save that much? No worries. The secret to getting there is to start small. Let’s say you make $1,000 your emergency fund goal.

U.S. $100 bills folded and secured with a paper clip

Save 10%

Weekly, or as you get paid, save 10% of your paycheck. Too much? OK, start with 5% or even 1% and build up from there. Just start!

Make it automatic

This is going to be hard, but I know you can do it: Make feeding your emergency fund—whatever the amount—the very first bill you pay, before anything else.

Once you have accumulated $50, go to your bank or credit union and open a savings account. Or open a free savings account at an online bank like Ally.com or Marcus.com (Goldman Sachs).

While you are opening that account, set up an automatic deposit authorization. This will give your bank authorization to automatically transfer the amount you designate from your checking account straight to your emergency fund. Here’s a secret: You won’t miss what you don’t see in the first place. Okay, you’ll miss it for the first few paychecks, but soon you really will not miss it.

Get rid of non-essentials

Give up the little things such as cable TV, eating out, and gym membership and that landline phone you have, but never use. That’s a start, you’ll know instinctively how to add to this list.

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Your Own Personal Loan Shark

Imagine paying outrageous amounts of interest to a greedy finance company and loving every minute of it. Or how about making off-the-record, back-alley deals with a loan shark so you can skip all the credit checks and paperwork?

a smiling cartoon shark dressed in business suit as pawn shop owner

Impossible? Not if that loan shark is you. You’ll be borrowing from yourself, making payments to yourself and collecting high rates of interest—all from you, for you.

The original idea of the credit union was to get the little person out of the clutches of the big money institutions. Credit unions are still a good idea! But even credit unions have their limits and standards when it comes to qualifying for personal loans. Being your own lender simplifies even the credit union strategy to just one person—you. And when you’re wearing the loan officer hat, dealing with you the borrower, both the lending and repayment benefit only you. What a deal!

So, how does it work?  Read more