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Uber Visa Review

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Uber has moved from transportation to credit cards with the introduction of the Uber Visa. But is it a good rewards card? We have all the details in our Uber Visa review.

Uber Visa

The popular ride-sharing service Uber has recently entered the credit card game with its Uber Visa Card. This slick-looking black card comes with an interesting set of rewards. Here, we’ll talk about the card’s rewards structure, bonuses, and drawbacks.

Uber Visa Card Rewards

This card is very much geared towards those who travel and dine out frequently. It offers the following cash back rewards:

  • 4% cash back on dining, including restaurants, takeout, bars, and UberEATS deliveries
  • 3% cash back on hotels and airfare, including vacation home rentals
  • 2% cash back on online purchases, including Uber, online shopping, and video and music streaming purchases
  • 1% cash back on everything else

The cash back rewards are actually awarded as points. If you spend $1 at a restaurant, you get four points. You’ll need at least 500 points, the equivalent of $5, to cash in. Once you reach that threshold, you can redeem your points for Uber credits, cash back, or gift cards. The points have the same value regardless of how you decide to redeem them.

As long as your account is open and in good standing, there is no limit to the amount of points you can earn. As with other rewards credit cards, where your points fall with the Uber card will depend on the category code the merchant uses.

The Uber Visa Card also has a nice bonus. It lets you get $100 in cash back after you spend $500 on purchases within the first 90 days of card membership.

Other Perks of the Card

Besides cash back rewards, this card comes with a few other interesting perks, some of which are clearly geared towards Millennials. The perks include:

  • No annual fee
  • A $50 subscription card for online subscription services after you spend $5,000 or more on the card in one year
  • Up to $600 in mobile phone damage protection when you pay your bill with your card
  • Access to exclusive events and offers in the U.S.
  • No foreign transaction fees
  • Easy-to-use app that lets you manage and redeem rewards quickly

Other Card Details

The issuer of the Uber Visa is Barclaycard, which has a very good reputation as a credit card issuer. The variable APR is between 15.99% and 24.74%, depending on creditworthiness. Unfortunately, this card doesn’t have any balance transfer or purchase introductory offers.

One other potential drawback is that this card doesn’t allow you to transfer your points to another point program. This can make it hard to get more value out of your points or to combine them with points earned on other credit cards.

Is it Worth It?

With the 2-4% cash back on special categories, this could be a hard credit card to turn down for frequent travelers. The next best credit card for dining out, the Capital One Savor Cash Rewards Credit Card, offers 3% cash back at restaurants. The Discover it card offers 5% cash back on restaurant purchases, but only for part of the year and on up to $1,500 in purchases.

So if you dine out frequently, the Uber card is definitely worth considering. And the other high-value categories aren’t too shabby, either.

On the other hand, this card’s sign-up bonus doesn’t stand out from the crowd. And the card makes it impossible squeeze more value out of your points by transferring them to other rewards programs. You can’t get higher values on certain points-based purchases, and you can’t transfer the points to another program where you would get more value for the points.

Still, if you like a straightforward cash back experience and spend a lot in this card’s high-value categories, it definitely deserves a look.

Who is it For?

The Uber Visa Card is a great option for frequent Uber riders and those who dine out often. It’s also great if you frequently shop online and want additional bonus points you don’t get on your other credit cards.

If you fly or stay in hotels often, check out the universe of travel rewards credit cards before you settle on this one. You may find that you can earn more points elsewhere, especially if you can squeeze more value from your points by redeeming them directly for air travel or transferring them to another program.


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Credit cards offer convenience, security, and rewards. Overspend with a credit card, however, and the interest and fees can bury you. Here are 10 tips to stop using credit cards.

stop using credit cards

If you’ve got a bad credit card habit, chances are you know it. Whether or not you’re willing to admit it is a whole other story. But admitting you have a problem is the first step to making changes.

If you can answer yes to any or all of these questions, you need some major changes:

  • Do you pay interest fees when you send in your credit card payment?
  • Have you ever paid your credit card late because you didn’t have the money for the payment?
  • Do you use your credit card when you don’t have enough cash?
  • When your issuer raises your credit limit, do you spend more because you can?

Credit card companies just love credit card users like this. They pay interest and late fees. They spend more on their credit cards, too.

This means credit card companies can charge merchants for more transactions. Altogether, these credit card users are the ones who are putting food on the table.

And putting more money in the pockets of credit card issuers means you’re putting less money in your own pocket. So the goal should be to stop these bad credit card habits. Instead, work to get to a place where you can use credit responsibly. This means taking advantage of rewards programs but never paying interest or fees.

Don’t think you can do it? Think again. Take these ten steps to systematically break your bad credit card habits.

1. Look at your spending carefully

Deep down, maybe you know your credit card habits have come about because you’re spending more than you earn. And this is a self-perpetuating issue. Once you get stuck in the cycle of paying interest and fees, it becomes harder and harder to get back to spending less than you earn.

So your first step is to track your spending faithfully. You can do this on a pen and paper. Or an Excel spreadsheet. Or you can use a program like that will automatically import your transactions.

The key here is to total up all of your spending from all sources–credit cards, checking account, savings, and cash. Keep this up for at least a month, and you’ll see where you’re spending money you shouldn’t spend. Keep it up for multiple months in a row, and you’re likely to find that you automatically reduce your spending.

2. Create a new budget

Once you’ve tracked your budget for a month or two, you can see what you are spending versus what you should be spending. Now it’s time to actually create a new budget. This budget should be based on the money you actually make each month.

Again, you can do this in different ways. You can stick to cash-only spending. Or you can use a program like Mint to track where you stand in various budget categories. Either way, you’ll need to use discipline to make sure you stick to your budget. The best way to do this is to cut back on spending slowly, particularly in essential areas like groceries.

Try to take your grocery spending from $500 per month to $200 per month overnight, and you’ll probably fail. But you can succeed by cutting just $20 per week from your spending. Keep doing this until you reach a comfortable, but frugal, level of grocery spending.

You can do this with other areas of your budget, too. The key is simply to budget for what you need and then stick to the budget. This will be more possible if you consistently check in on your spending. Make this a habit, and you’ll find you’re more likely to stick to your budget.

3. Build an emergency fund

This step can take some time, especially if you’re in the habit of overspending rather than saving. But find places where you can stash back even $10 per week. Over time, you’ll build up a pad of savings that can help you in an emergency.

Start by opening a high-yield savings account. Then, begin with the first goal of putting about $1,000 into the emergency fund. Sure, you’ll eventually want to save three to six months’ worth of expenses. But this can take a really long time. Starting with this smaller goal lets you be prepared for minor emergencies, which can help you cut back on credit card spending.

Remember: an emergency fund is to be used in true emergencies only. This doesn’t take the place of your credit card. The purpose of the emergency fund is to remain untouched for regular expenses but accesible when major spending is required. Some examples might be the loss of a job or a significant medical expense.

For more details, see Five Components of an Emergency Plan, but ignore component number four.

4. Stop using your credit cards

Building up an emergency fund is essential for this step to start working. If you’ve consistently used your credit card for minor emergencies, you’re relying on it too much. When you have a bit of money in savings, you can reduce your credit card dependency. And this can let you stop using your credit cards.

Now that you’re living on a budget, you should not need to rely on your credit cards anymore. Instead, you should only be spending the money that actually comes into your bank account each month.

So stop using your credit cards. You might want to take baby steps here. Start by simply leaving the cards at home all the time. Then remove them from your PayPal account and other automatic online payment options. Then, start shredding them, which will lead you to the next step.

5. Destroy your credit cards except for one or two

You can play this one of two ways. If you’re disciplined enough, you can simply destroy the physical credit cards and remove them from your online accounts. This means you’ll stop spending on the cards but won’t actually close the accounts. This is because closing old credit card accounts can actually damage your credit score.

But if you have a serious problem, this may not be enough to stop your overspending. Instead, you may need to go as far as actually closing your credit card accounts. Overspending, after all, is a larger issue than getting a better rate on your next mortgage. So if you want to really take away your ability to overspend on credit, you can close the accounts.

However, you’ll only be able to close accounts that have no outstanding balance. You may want to skip to step seven if all of your cards have an outstanding balance.

6. Lock away your remaining credit card

Now that you have one credit card left, realize that you will not be using this card for everyday spending; for now, cash is king. Put your remaining credit card out of sight. Lock it away. I’ve even heard of some people who put their credit card into a cup of water in the freezer. The extra step of breaking a block of ice to get to your credit may be an extra demotivator.

Why keep a credit card at all? You may need it in a real emergency before you emergency fund is fully built up. But making it difficult to access will mean you’re less likely to use it for non-emergencies.

7. Consolidate your balances onto one or two cards

Gather the latest statements for the cards containing balances. Choose one or two with the lowest interest rates, and consolidate your balances onto these cards. By calling the credit card company, you can provide the information for your other cards with balances. Then they will initiate a balance transfer. Ask for a transfer fee waiver. If they aren’t willing to waive the balance transfer fee, consider using a different card to consolidate your balance or apply for a great balance transfer credit card.

Another option is to look at an unsecured personal loan to consolidate your balances. This type of loan can get you into a lower interest rate and help you pay off your credit card debt more quickly. Plus, once you’ve consolidated debt off of some of your cards, you can then close those zero-balance accounts.

What if you don’t have good enough credit or enough available credit to consolidate your debt? In this case, you’ll need to skip to steps eight and nine. You can make this work without consolidation. Consolidation can just make it easier.

8. Enact a cash-only policy

Once you’ve lived without your credit cards on hand for a couple of months, your budget should be in a good place. Now you know what you can and need to spend each month. So now you can enact a cash-only policy.

This doesn’t necessarily mean you have to spend physical cash. But that can be a good idea. Spending cash actually helps you spend less money. But spending cash can also be unwieldy at times. So another option is to keep cash on-hand for certain expenses, such as groceries, but to use your debit card for other expenses.

The key is that you have to actually have the money in hand–either physically or in your bank account–to spend it. Getting into the swing of this can be difficult. But, trust me, it’s worth the learning curve. Once you start spending only what’s coming in, you can turn your attention to spending less than what you make. And this is how you’ll really start to make financial progress.

9. Pay down your balances

Now it’s time to start reversing the damage you’ve done with your bad credit card habits. You’ll likely need to pay more than the minimum payments on your accounts to start getting out of debt. So use that money that you’ve suddenly found in your now-strict budget to get this done.

There are a couple of different ways to pay down your balances. And, really, either one is sufficient, as long as you keep on keeping on. One option is the Debt Snowball method popularized by Dave Ramsey. This has you start paying off your smallest balance first. Once that balance is paid off, apply its minimum payment and any extra money to the next-smallest balance.

The advantage of the Debt Snowball is that you get some quick wins up front. This can help you stay on track as you work towards paying off larger and larger balances.

The other option is the Debt Avalanche. This has you start with the highest-interest account first. Then pay off lower-interest cards as you move through your debts. The advantage of this approach is that you wind up paying less interest over time.

The Debt Avalanche is the most logical way to pay off your debts. But it doesn’t make a huge difference unless you’re in a lot of debt or have a big differential between your interest rates.

You can check out a more in-depth discussion of these two options here. But, really, the main issue is that you start paying off your debts and keep on with it until your credit cards are paid off.

10. Check your progress each month

Paying off debt takes time and dedication. You’ll need to keep moving forward towards your goals, even when things get tough. One way to keep making progress is to see how far you’ve come.

The best option is to come up with a way to consistently track your balances each month. You’re already checking in on your spending frequently, right? Well, make a chart where you keep track of your credit card balances month after month, and watch as they disappear.

You can do this with some budget-tracking softwares, such as Mint. Or you can create your own spreadsheet for tracking your credit card balances. Either way, be sure you’re checking in at least once a month to keep track of your progress. Seeing how far you’ve come will help you keep moving forward until you finally break your bad credit card habits and reverse the damage they’ve done.


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The cell phone company war bodes well for consumers, with cellular plans reaching all-time lows. Here are some of the cheapest cell phone plans we could find.

cheapest cell phone plans

Over the past few years, cell phone providers have declared an out-and-out war to win over consumers. This spells good things for the consumers, who can now take advantage of more low-cost cell phone plans than ever.

These days, even the “big four” cell providers–Sprint, T-Mobile, AT&T, and Verizon–are lowering their prices. And there is a host of other companies jumping on board with cheap voice, text, and data services.

Finding the right plan for your needs requires some research, though. First off, the provider you choose should have decent coverage in your area and areas to which you travel often. Saving $15 a month on your cell phone bill doesn’t mean much if you constantly drop calls in your own living room!

Plus, you’ll need to ensure that the plan you choose has what you really need in a cell phone plan. That might mean unlimited voice and text, or a hefty amount of data for your business.

Whenever you are ready to lower your cell phone bill, check out these 20 low-cost plan options.

Sprint Unlimited Freedom

Sprint’s Unlimited Freedom plan offers an excellent deal of anywhere from two to five lines with unlimited data, talk, and text for $100 per month. One line will run you $60 a month but two, three, four, or even five lines on the same account will only be a flat $100 each month. (AutoPay required for this special pricing.)

That’s as little as $20 per line for unlimited talk, text, and data!

Each line will be able to stream HD video, gaming, and music, as well as high-speed data for everything else (like apps). Plus, you’ll also get a 10GB/line/month mobile hotspot and a free Hulu plan.

T-Mobile ONE

The ONE plan offers quite a bit for a great price. For a limited time, you’ll also receive a number of neat benefits for having an account, too.

You’ll receive unlimited talk, text, and data for $70 for the first line, $60 per for two lines, $47 per for three lines, or $40 per for up to four total lines. So, you’ll pay $160 per month if you have four lines on the same account. (To get the $40/line rate, you’ll need to sign up for AutoPay.) Oh, and that’s a flat rate–taxes and fees are already factored in!

The plan offers unlimited everything (phone, text, and date) in Mexico and Canada, and unlimited text and data just about anywhere else in the world. You have unlimited streaming at DVD-quality, a free 2-user Netflix plan, in-flight texting and an hour of data on Gogo-enabled flights, and unlimited 3G hotspot data.

Also, if you’re over 55, you can take advantage of the T-Mobile ONE 55+ plan, which gives you two unlimited lines at $60 each per month.

AT&T Mobile Share Advantage

This customizable plan allows you to choose how much data you want to share. Pick from 1GB for $30 a month to 25GB for $110 per month, then add smartphones for a monthly access fee of $20 each per month.

If you don’t use much data, this plan would be a great way to cut your expenses down to as little as $70 per month for two lines and limited data access. It also allows for rollover data, on months where your family doesn’t use as much as expected.

Verizon Plan

This giant is known for its great coverage, but has started to lower its prices to stay competitive. Their unlimited plans are no exception.

Choose the number of lines you’d like to add, from one to 10, and then select either the goUnlimited or beyondUnlimited option.Both offer unlimited 4G LTE coverage, unlimited talk & text, unlimited mobile hotspot, VerizonUp rewards, and an optional military discount.

The difference between the two is the speed/quality at which you can stream videos and the speed limit for your mobile hotspot. Plus, the beyondUnlimited plan also includes Mexico and Canada.

The goUnlimited plan starts at $75 for one line, $65 per for two lines, $50 per for three lines, $40 per for lines four through 10. For the beyondUnlimited plan, it starts at $85 for the first line. Then, you’ll pay $80 per for two lines, $60 per for three lines, and $50 per for lines four through 10.

Metro PC

Launching into the smaller providers, we’ll start with Metro PCS, which offers nationwide 4G coverage. Its “unlimited” data, talk, and text plan really comes with 1GB of 4G data before kicking you down to lower data speeds. Still, the plan is a good deal at just $30 per month for each line between one and four. If you want more data, you can pay $40 per line for 5GB of data or $50 per for unlimited data.

For just $60 per month, you can get unlimited talk and text plus unlimited data and a mobile hotspot.


Cricket’s Basic plan runs just $30 per month, and includes unlimited nationwide text and talk plus 2GB of high-speed data access. Or the $60/month Unlimited plan offers unlimited high-speed data, unlimited nationwide talk and text, unlimited international texting, and data access as well as unlimited talk and text to and from Mexico and Canada.

Cricket also offers group pricing. Plus, you’ll get a $5 per line discount for signing up for auto-pay with the higher-tier plans.

Page Plus Cellular

Page Plus Cellular is a no-contract provider that still offers super-cheap plans with restricted minutes and text. The cheapest plan is just $10 per month for 250 minutes, 250 texts, and 100MB of data. Or opt for the largest plan at $64 with unlimited calling, unlimited national and international texting, and unlimited 4G LTE data.

Virgin Mobile

This provider is gaining in popularity, and not without reason. Its Inner Circle plan is just $50 per month and includes 4GB of high-speed data. Plus, it allows you to stream music from services like Pandora and Slacker without tapping into your data.

To add a mobile hotspot is another $10 a month, unlimited everything to Mexico and Canada is $5 a month, and unlimited everything to over 70 countries is another $10 a month.

Boost Mobile

Boost’s Unlimited Starter package starts at just $35 per month and includes 3GB of 4G LTE data. Like Virgin, Boost offers unlimited music streaming through certain music apps.

For more data, check out the $50/month Unlimited Gigs plan, which offers optimized streaming for videos, gaming, and music, and unlimited 4G LTE data for everything else.

Straight Talk

Available plans for Straight Talk depend on your phone and current phone number, so you’ll have to check availability. But some example options include a 1-year unlimited plan for $495 total. This one offers unlimited nationwide talk and text and 10GB of data per month at 4G LTE, restricted to 2G service after that.

Republic Wireless

For just $15 per month, Republic offers unlimited talk and text without data (except on WiFi). It’s a good plan option if you’re near a WiFi signal most of the time. Plans add more data from there, up to 10GB per month on the $90 plan.

GoSmart Mobile

This provider offers four service levels, including a $25/month plan that includes unlimited international texting, unlimited national talk, and unlimited 4G LTE access for Facebook. Its largest plan is $55/month and includes up to 20GB per month of 3G data access, as well as the other perks listed.


This provider actually offers a free Basic Plan that includes 500 texts, 200 minutes, and 500MB of data each month, as well as free calling over WiFi. You may be able to bring your own existing device to this provider, or purchase a device from them.

H2O Wireless

For $30 per month, you can get unlimited talk and text, 3GB of data, and $10 of international talk credit. Or go up to $60 per month of unlimited talk and text, 10GB of high-speed data (restricted to 2G data thereafter), and $20 per month of international talk credit. H2O also offers pay-as-you go plans, which let you customize your payment based on how much talk, text, and data you’ll actually use at a time.

Scratch Wireless

This provider, like many other small providers, operates on the “WiFi First” principal. In other words, if WiFi is available, your phone will operate on that rather than using data. When connected to WiFi, you’ll have unlimited text and data. So if you’re typically in places where WiFi is available, Scratch could be the ideal service for you.

You’ll pay an annual access fee to use the service, which is $69 a year for cellular devices and $89 for smartphones. You can also buy data and voice passes, for use when WiFi isn’t available. These start at $7.99 for a 30-day pass or a certain amount of data/voice time.


Communicate mostly by text? ChatSIM is super-cheap way to make that happen. The base plan costs $10 per month and comes with unlimited texts and emojis anywhere in the world. You can also purchase multimedia credits to cover photos, videos, and calls, ranging from $15 to $60 each.

Red Pocket

Red Pocket offers plans that begin at just $10/month for 500 each minutes and texts. Or, you can opt for the $19/month plan to get unlimited talk and text plus 500MB of data.

These plans go up to $60 per month for unlimited everything with 8GB of high-speed data (and lower speed data after that).

Simple Mobile

You can bring your own phone or buy a phone through Simple Mobile, and then sign up for a $50/month plan with unlimited 4G LTE data. Don’t need the data? Keep it simple with a $25/month unlimited talk and text plan (plus 1GB of data).

US Mobile

This provider offers completely customizable plans, so you only need to pay for the services you actually use. For instance, you can pay $3/month for 100 talk minutes, or $15/month for up to 5,000 minutes.

Similarly, texting costs $2/month for 100 texts or $7/month for 5,000 texts. And data costs from $2/month for 100MB to $26/month for 5GB. Add on a $4/month service charge, and you’ve got a plan you can completely customize to your actual usage.

ROK Mobile

As with other providers, this one cuts back on the cost of streaming music by providing the ROK Music App. It offers a $45/month plan with unlimited talk, unlimited text, and 5GB of 4G LTE data.

So which one wins?

As you can see, there’s some huge variability in plan prices here, from free plans that focus on WiFi coverage to $100/month plans from the “big four.” The key is to ensure that any provider you choose will have good coverage in your area, and that the plan will be sufficient to meet your talk, text, and data needs.

Be sure to read the fine print. Also talk to friends and neighbors about their coverage, especially with lesser-known providers. Then, pick a plan and start reaping the financial reward of this wireless war for customers.


It’s important to save for a rainy day. In this guide, we give you ideas on where to put an emergency fund and how much you should save.

where to put an emergency fund

The world of personal finance is rife with oversimplified platitudes and one-size-fits-all advice. No where is this more evidenced than in the often-repeated advice about emergency funds.

Typical advice says that you should save three to six months’ worth of expenses in a high-yield savings account. Some financial gurus opt for eight months’ worth of expenses saved up, while others say four is enough.

Still others advocate for starting with a couple thousand dollars and beefing up the fund after you’ve paid off all debts.

How much you should have in an emergency fund and where you should keep it is more personal than this. In some situations, a smaller emergency fund may work just fine. And for some people, a low-interest home equity line of credit can be a reasonable emergency fund. In other situations, having this much cash on hand is a good plan.

But high-yield savings accounts are really providing barely enough to keep up with inflation. Stashing a ton of cash in a savings account may not be the best option. In this case, you might consider having a broader, more diverse emergency plan. This can help you make it through true emergencies without losing out on the interest your money could be earning.

If you’ve never thought through what you’d do in a financial emergency, consider creating an emergency plan that includes the following components:

1. “Mattress cash” stash

Clearly, I don’t actually mean hiding cash in your mattress, necessarily. But it’s not a bad idea to stash a small amount of cash around your home. If your ATM network is down for some reason and you need cash, you can get what’s in your home. I’m not talking about keeping a ton of cash in your home. This should be maybe two or three hundred dollars.

After all, in the case of a truly catastrophic world event, that cash won’t have much value, anyway. So we’re not really planning for that type of situation. This is more the type of situation where you’ve lost your wallet and had to cancel your debit and credit cards. You’re waiting on replacements, but you need to put gas in the car and groceries in the pantry right now. In this situation, you could make a couple hundred dollars work for a week or two.

2. Liquid account

Unless there’s a worldwide banking catastrophe, you should be able to access the next portion of your emergency fund within one day. You might consider putting this portion of your emergency fund into a money market or high-yield savings account. The idea is to earn as much interest as possible without losing FDIC insurance and easy access to your cash.

How much should you put into this fund? It really depends. The idea is that this should be enough to get you through from a job loss to the first paycheck at a new job. Many experts recommend having one to three months’ worth of expenses in this type of account, if not more.

The key here, of  course, is that you’re saving expenses, not your actual income. If you make $4,000 per month but only have to spend $2,000 per month to meet your basic needs, you should use $2,000 as your monthly goal. So for three months’ worth of expenses, you’d only need $6,000 in savings.

Your thoughts for this portion of your emergency plan may differ, depending on your current situation. In a two-income family, for instance, you may not need as many months’ worth of savings. After all, the chances of both working adults losing their jobs at the same time are probably fairly slim. On the other hand, if your particular career suffers from an unstable job market, consider saving even more in this part of your plan.

3. Certificate of Deposit ladder

You can earn a bit more interest on your emergency savings if you use a short-term Certificate of Deposit ladder. With a CD ladder, you progressively invest in more certificates of deposit, which each have their own maturity date. As each CD matures, you can either pull out the money, penalty-free, to cover your expenses. Or you can reinvest it if you’re not in the middle of an emergency.

Combined with liquid savings, a CD ladder can be a good way to get through an emergency without losing out on slightly higher APRs. For instance, say you save three months’ worth of expenses in your liquid account. Then you create a CD ladder of three-month CDs. You’re then guaranteed to be able to tap at least one CD by the time you run out of liquid emergency fund savings. And if you need to keep pulling from the CD ladder, you can.

This way, you can take advantage of potentially higher CD rates, while avoiding penalties for withdrawing from your CDs early.

4. Investments

As you’re planning how to save for retirement, consider potential emergencies, too. In an emergency, you can withdraw your contributions (not your earnings) from a Roth IRA. Depending on your broker, these withdrawals could be free from penalties, taxes, and fees. Once the emergency has calmed down, you can contribute the withdrawals back into your Roth IRA.

You can also consider tapping into your taxable investments, if need be. This isn’t always the best option, especially if your investments are down. But if a true emergency, it can be a way to cover your expenses and potentially get some tax benefits while doing it. Remember, too, that if you sell when your investments are worth more than when they were purchases, you’ll face some tax implications. Just account for that when determining whether and how much to withdraw from your investments.

The best-case scenario is, of course, to have enough in liquid and intermediate savings not to have to tap your investments in an emergency. But understanding how this could potentially work is a good idea when you’re planning how and how much to invest.

One more item of note along these lines: do not rely on a 401(k) loan during an emergency. If you should lose your job, the loan would come due immediately. That just makes an already tenuous situation even more risky.

5. Credit

Using credit in an emergency can be a slippery slope. But it can be used wisely as part of a broader emergency plan.

For instance, if you’re currently paying hefty interest on credit cards, you should put your extra cash into paying them down rather than saving for an emergency. But you’ll want to be sure you don’t go back into high-interest debt if an emergency does arise. In this case, saving a couple thousand dollars to start can be helpful. This can help you get through unexpected car repairs or other smaller emergencies.

Then consider keeping open a home equity line of credit to use for larger emergencies. With today’s lower interest rates, you could finance a longer-term emergency without paying interest through the nose.

Another option is to keep your eyes open for credit cards with an introductory 0% APR on purchases. These cards are widely available to those with good credit. And you can often get one at the drop of a hat. This could get you access to a line of credit in an emergency. Hopefully the introductory offer would give you enough time to get through the emergency and then repay the balance before the introductory period ended. Luckily, credit card issuers are now offering these introductory periods for anywhere from 12 to 18 months, and sometimes more.

6. A bare bones budget

On an everyday, non-emergency basis, you probably have lots of little–or even large–expenses that you could cut out in a true emergency. It’s a good idea to know ahead of time what this would look like. Take a look at your spending for the past three months, and determine which expenses you could have cut with ease and which you could have cut with a bit of work or sacrifice.

This might include things like your cable subscription, other entertainment-related expenses, any dining out expenses, extravagant grocery-related expenses, and more. See just how much you could have cut out of your budget, and put that on paper. That’s your bare bones budget. If you had absolutely no money coming in, that’s how much you’d need to survive.

The exercise of writing down your bare bones budget is helpful for a couple of reasons:

  1. It helps you determine your emergency savings goals. Remember, saving for an emergency is about saving for essential expenses, not your normal, I-have-a-good-income spending. Writing down your bare minimum budget lets you see what you actually need to save for emergencies.
  2. It’ll give you a reference point in an emergency. When an emergency hits, you’ll be too busy looking for your next job or putting out the proverbial financial fires to think too much about basics like budgeting. So having this bare bones budget written down ahead of time can be helpful. You can use this document to know which services to cancel right away and how to budget until the emergency is over.
  3. You’ll see how much extra you’re really spending. Finally, writing down your bare bones budget is great even if you aren’t in the middle of an emergency. It’ll help you see just how much of your daily spending is truly necessary versus extra. While you don’t need to live on this strict budget all the time, it’s a good way to gauge if your spending is reasonable or getting out of control.

7. Stock up on essentials

I’m not advocating becoming a doomsday prepper, but having a stocked pantry and medicine cabinet can make emergencies easier to get through. And it’s not that hard to plan ahead. Just add a few extra cans of beans or other non-perishables to your cart each time you go to the grocery store. Shop in bulk for paper goods like toilet paper and paper towel. And keep your medicine cabinet well-stocked with first aid supplies, over-the-counter medicines, and such. And if you’re on any prescriptions, be sure to keep them up-to-date and refilled as often as possible.

These essentials may not get you through a several month long period of unemployment. But if you can get through the first month or two without having to buy more than milk and eggs from the grocery store, your emergency savings will go a long way. This is just a simple step to take over time so that you can cut expenses at the drop of a hat.

When you think about your emergency plan as more of a comprehensive plan, you’ll feel more prepared for potential emergencies. You’ll also know how to save for emergencies without your savings being eaten away by today’s still-low interest rates. Do you have a broader emergency plan? What does it look like?


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