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How to Audit Your Medical Bills

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Medical issues are challenging to deal with on their own, but then come the medical bills. Unfortunately, medical bills are the leading cause of bankruptcy in the United States. Medical bills can often be astronomically high, causing many people to fall into debt when trying to pay them off.

However, many Americans don’t realize that they should always be reviewing their medical bills to verify the charges are valid. This is especially true for people who are worried about paying their bills. An audit from Equifax found that hospital bills exceeding $10,000 had, on average, $1,300 in incorrect charges.

You may not need to check your bill thoroughly if you had just a simple consultation, but there are more likely to be errors if you had a more complicated visit, such as a surgery. Keep reading for a comprehensive guide and tips on how to audit your medical bills.

What to Do When Reviewing Your Medical Bills

Take these steps when auditing your medical bills:

Ask for an Itemized Copy

Your medical provider will likely send you a summarized version of your medical bill. This is a condensed version of your statement that groups charges into categories, so it doesn’t provide you the level of detail and insight you need to review your bill thoroughly.

If you receive a summary bill, reach out to the relevant parties and get the itemized version instead. You have the right to ask for an itemized bill, either from the billing department at the medical facility or online. Please note that even a small procedure can result in a multipage statement, so you’ll have a lot of reviewing to do.

Once you have the copy, review it for any suspicious items. This can include:

  • Double billings: Does a line item show up twice when you don’t think it should? For example, two doses of morphine when you’re sure you were only given one. You can compare charges to your medical records to verify or disprove items on your bill.
  • Non-procedural or non-medical-related items: Some hospitals have been caught trying to charge for things like hospital bed rentals, surgical equipment and other reusable supplies. Hospitals aren’t legally allowed to bill these items to patients, and you can dispute these charges immediately.
  • Unused items: Items such as slippers, toiletries and over-the-counter medication can cost hundreds of dollars if the hospital supplies them. For example, a simple over-the-counter painkiller, such as Tylenol, can cost as much as $15 for one pill. Dispute any false claims and, if you can remember to do so, bring your own slippers.
  • Mistaken identity: Mistakes happen on medical bills from time to time. A fellow patient with a similar name or insurance number could have all their medical treatments added to your invoice. Don’t fall victim to mistaken identity, and make sure your charges match your treatment.
  • Refused treatments: At some point during your medical care, you may have refused certain medications or treatments. If you did, make sure they don’t appear on your final bill.
  • Other: Watch out for any other charges that seem incorrect in any way, such as incorrect medication names or dosages, incorrect dates, the wrong name or address, wrong insurance information, wrong surgery minutes, incorrect room classification, and so on.

If there are any codes or words on your bill that you don’t understand, take the time to look them up. You should be able to find explanations online. Some useful resources include this Medical Dictionary, the Medicare code lookup tool and this ICD code reference tool. An ICD code ensures you were billed for the correct diagnosis.

Check Your EOB and Medical Records

Next, check your Explanation of Benefits (EOB) and your medical records. Compare these to a copy of your medical bill. You can get your EOB from your insurance provider. Your EOB will automatically come via mail or email and show what portion of the charges are being paid by the insurance provider. The statement will say “Not a bill” at the top.

You can get your medical records from your health provider. You will likely have to fill out a form requesting a copy of your medical records, and you may be charged a processing fee for the request. The cost can vary for each provider, but states usually limit how much a provider can charge. Ask up front what that fee will be.

Talk to Your Physician

Hospital stays are often traumatic, and it’s unlikely you remember every procedure or medication ordered by the doctor. It’s entirely within your rights to call your doctor and ask them to verify each item. Another sound strategy is to ask for a written copy of the original order. Hospitals can’t bill you for procedures not ordered by your doctor in writing. Compare the written copy of the original order to your medical bill and dispute anything that doesn’t match.

Keep Records of Everything

Keep records of everything, including receipts, dates of services and payments, healthcare visits and provider names. This will help you avoid confusion as you sort through all the details. It will also make any disputes easier as you have all your proof organized. Additionally, if you end up in small claims courts, records will be necessary for your lawsuit.

Hire an Auditor

If you have tried to dispute your bill to no avail, it’s time to take action. You can request an internal audit from the hospital and consider hiring your own auditing service to secure a second opinion. Escalating things to this stage usually uncovers errors in the billing and results in reduced costs.

What Should You Do Next?

Challenge the Charges in Question

The first step in challenging your medical charges is to contact the medical facility’s billing department and try to speak to someone who may reduce your expenses.

Many Americans don’t realize that medical charges are negotiable. Even if you can’t have items removed, you can ask for them to be reduced. Hospitals can ultimately charge whatever they want for medical costs, but you can compare your fees to what is considered standard. Use the FairHealth tool for comparison. If your charges are double or triple the standard, bring this up in negotiations.

You can also file an appeal with your insurance company.

Work With a Patient Advocate

If challenging the charges on your own doesn’t result in anything, you may consider hiring a patient advocate. An advocate will negotiate on your behalf, and they have the experience to garner results. Usually, advocates only charge you if they’re successful in getting a reduction in your bill, and their charges are typically a percentage of what you saved on the bill.

File a Formal Complaint

Some cases of medical price gouging are downright illegal. If you believe yours to be an unlawful situation, you have every right to file a formal complaint with your state’s attorney general’s office. Creating a record of abuse can also help protect your credit from further unfair damage.

Protect Your Credit

When your medical debt is sent to collections, you have a period of 180 days before it appears on your credit report. This means you have some time to work things out before your credit is impacted.

Ultimately, you need to make sure you take care of your bills in one way or another. Negotiate what you can, pay what you can and communicate with billing staff so they know what you’re doing. This can delay them from sending the billing to collections. Even if the medical debt isn’t fair, it can end up being sent to collections and ruining your credit.

Be proactive in auditing your medical bills quickly and acting as soon as you suspect anything is wrong. If you’ve already had medical bills show up on your credit report, you can still work to improve your credit score. Consider using credit repair services from Lexington Law. We’ll help you address any unfair and unverified negative items on your credit report. Get your credit score back on track today.


Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.

Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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Habits of The 800 Club — The Path to Perfect Credit

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

A credit score of 800 or higher is considered a perfect score. At this level, individuals are given the best rates on their mortgages, credit cards, loans and any other form of credit. Americans who boast a credit score of 800 or more are exclusive members of the 800 Club. Keep reading to find out all about the 800 Club and how you can become a member.

What Is the 800 Club?

“The 800 Club” is a common phrase used to describe Americans who have a credit score of 800 or higher. According to FICO, in 2019, just 22 percent of Americans were a part of this exclusive group.

Being a part of the 800 Club gets you access to the lowest rates for borrowing costs, as well as plenty of other benefits. First, you’ll be approved for any type of credit card. This includes credit cards with no annual fees, cards with significant initial spending limits, cards with 0 percent financing, no-foreign-fee credit cards and cards from hotels, airlines and retail stores.

You’ll also get the best rates when it comes to taking out a mortgage, an auto loan, a credit line, a personal loan or student loan refinancing options. And anytime your credit score is checked—such as for an apartment rental or a job application—you’ll pass inspection with flying colors.

It’s essential to understand that you can still get the same or similar benefits once your credit score is 700 or higher. That’s why it’s good to shoot for higher credit, even if a score of 800 feels impossibly far away right now. The higher your credit score climbs, the more benefits you receive.

How Can You Be Like Consumers in the 800 Club?

There are everyday habits that consumers in the 800 Club all have. If you understand these habits and emulate them, you’ll be guaranteed to see a rise in your own credit.

Maintain a Zero Balance

When used correctly, credit cards can be an asset rather than a liability. Those in the 800 Club understand that using credit is beneficial to your credit score, but only if you pay off the amount owed in full every month.

By completely paying off your balance every month, you pay zero interest, maintain complete debt control and show lenders you’re responsible with money. Paying off balances in full needs to happen on time and every month.

You should also work to understand credit utilization. Your credit utilization is the amount of credit available to you versus the amount you use. Generally speaking, it’s ideal to keep your credit utilization ratio under 30 percent. If you pay everything off every month but have a high credit utilization ratio, your credit score will be negatively impacted.

For example, if you have two credit cards with credit limits of $5,000 each, you have $10,000 available every month. If you spend $7,000 on those cards every month and pay it off in full, your credit score may still suffer because your credit utilization is 70 percent. Lenders prefer a low credit utilization ratio as it shows you’re not relying on credit to cover your expenses.

Have a Diverse Mix of Accounts

Having a healthy credit score means having a diverse mixture of accounts. Lenders want to see that you can handle many different types of debt and still maintain responsible habits. 800 Club members often have a portfolio mix of revolving credit (credit cards, credit lines, etc.) and installment debt (mortgages, personal loans, student loans, etc.).

However, it’s not recommended you increase your overall indebtedness just for the sake of improving your credit diversity.

Be Selective About New Accounts

As you look to build your credit, you may start to open some new accounts. Whenever you do this, make sure always to read the fine print and look out for good benefits. There are plenty of lenders out there competing for your business, so always do some comparison shopping.

Avoid retail credit cards, which often have high interest rates and fees. Instead, find cards with the best rates, sign-up bonuses, reward programs and no annual fees. Smart credit will help you spend and save.

And make sure to never sign up for any credit that’s too risky, such as payday loans.

Avoid Cosigning

Cosigning may feel like a nice gesture for someone who needs your help, but it’s often a road to credit problems. When you cosign on anything, you accept full responsibility for paying it back if the other party fails to make payments.

Additionally, anytime the other party makes a late payment or misses a payment, it impacts your credit score too. It’s too risky to have your credit score tied to someone else’s actions. If possible, avoid these problems by politely declining any requests to cosign on credit.

Lower Your Debts

One of the main factors in determining your credit score is your debt-to-income ratio. Individuals who are part of the 800 Club live well below their means and have a low debt-to-income ratio. This means they prioritize paying off their debts and don’t overspend.

If you have any debt, from student loans to mortgages, lowering these balances can infinitely improve your credit score.

Stick to a Budget

In order to ensure you’re not spending beyond your means, you’ll need to stick to a budget. People don’t just get into the 800 Club by accident. They plan their finances, make smart decisions and stick to the plan. A budget will allow you to quickly pay off any existing debts and, once your debts are paid off, maintain a zero balance.

Budget planning has never been easier than it is today. There are plenty of automated budgeting apps, such as Mint (free) and YNAB (subscription-based), that link to your bank accounts and provide insights for you. You’ll be able to set budgets and goals and receive alerts when your finances are off-track.

Clean Up Your Credit Reports

If you have the goal of getting into the 800 Club, it starts with knowing where you currently are and what’s holding you back. Start by getting a free copy of your credit reports and reviewing your credit score.

If any negative items are incorrect on your credit reports, you can dispute them. If you find any other information that has negatively impacted your credit reports, you can ensure you don’t make those mistakes again.

Start Working Now to Improve Your Score

It’s never too late to start working on your financial habits and improving your credit score—and the earlier you start in life, the better. Start building healthy financial habits now and you’ll see your credit score steadily increase.

You’ll greatly benefit from your efforts with better interest rates, more financial opportunities and easier approvals for all types of applications. And, in no time at all, you’ll be a member of the 800 Club yourself!

If your credit score is low and you don’t understand how to tackle fixing your score, consider credit repair services. Lexington Law has credit professionals who can review your credit report and dispute any inaccurate or unfair negative line items.

We save you the time and effort of dealing with the credit bureaus, and we know how to get results because we’ve dealt with them before. Contact us now to find out how we can help you fix your credit.


Reviewed by Kenton Arbon, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Kenton Arbon is an Associate Attorney in the Arizona office. Mr. Arbon was born in Bakersfield, California, and grew up in the Northwest. He earned his B.A. in Business Administration, Human Resources Management, while working as an Oregon State Trooper. His interest in the law lead him to relocate to Arizona, attend law school, and graduate from Arizona State College of Law in 2017. Since graduating from law school, Mr. Arbon has worked in multiple compliance domains including anti-money laundering, Medicare Part D, contracts, and debt negotiation. Mr. Arbon is licensed to practice law in Arizona. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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How Much Should You Spend on Christmas? 13 Spending Statistics

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Christmas time is a joyful season for many, but unless you’re intentional with your finances, it can quickly become a source of stress.

When determining how much you should spend this year, it makes sense to consider how much others typically spend. For an average baseline of how much you should shell out this year, many financial experts suggest calculating one percent of your annual income to arrive at a figure that won’t break the bank.

With each passing year, the holiday season’s focus on consumption seems to loom larger than the last. Grandiose store displays and nonstop commercials pressure us to spend far more than we can afford—leaving many Americans with the unfortunate burden of credit card debt come the new year.

According to NerdWallet’s 2019 Holiday Shopping Report, 71 percent of shoppers planned to use a credit card to fund their holiday spending. While the use of credit cards during the holidays might not come as a shock, the debt many are left with long after the holiday season ends is more concerning: Roughly 48 million Americans were still paying off credit card debt from their 2018 holiday expenditures in 2019, according to the same report.

If you’d rather avoid paying off this year’s holiday well into next year, all you need is a bit of preparation and a plan of action to keep your spending in check.

Alt text: Average Holiday Debt Per Year (2015–2019): 2015: $986. 2016: $1,003. 2017: $1,054. 2018: $1,230. 2019: $1,325. Source: Magnify Money

How to Determine How Much to Spend on Christmas This Year

When figuring out how much you should shell out for your Christmas spending, it can be helpful to look at some national averages as a baseline. According to a Gallup study, Americans planned on spending an average of $942 on gifts in 2019.

Compare this to the average household income of around $69,000 as reported by the U.S. Census Bureau, and you get an idea of what a reasonable amount might be for you. If you make $34,500—half of the national average—a general guideline could be a gift budget of around $471, or half of the average spent on gifts. Financial experts recommend spending around one percent of your take-home pay on gifts.

To be sure you can afford your holiday spending, creating a budget ahead of time is your best bet. It doesn’t have to be elaborate, but having a clear picture of your finances up front can save you stress down the line.

Start by listing out all your monthly fixed expenses—the expenses you know you must pay each month. This includes food, home utilities, gas and other monthly expenses like cable and phone bills. Subtract your monthly expenses from your monthly income and see how much you have left. This is your disposable income.

From there, decide how much of your disposable income you can put towards your Christmas spending. If you can put all of it in, that’s great! If you’re worried it’s not enough, consider where in your current budget you can reign in your spending in order to bulk up your holiday budget.

Holiday Spending Statistics

  • 71 percent of shoppers planned to use a credit card to fund their holiday spending. (Source: NerdWallet)
  • Holiday retail sales throughout the last two months of 2019 grew to $730.2 billion. (Source: National Retail Federation)
  • Non-store holiday sales grew by 14.6 percent in 2019. (Source: National Retail Federation)
  • U.S. holiday spending sales reached over $1 trillion in 2019. (Source: eMarketer)
  • Roughly 48 million Americans were still paying off credit card debt from their 2018 holiday expenditures in 2019. (Source: NerdWallet)
  • The average household income for Americans is around $69,000. (Source: U.S. Census Bureau)
  • Individual Americans planned to spend an average of $942 on gifts in 2019. (Source: Gallup)
  • Holiday retail sales came in at about a whopping $1.007 trillion dollars in 2019, a 4.5 percent increase from 2018. (Source: eMarketer)
  • Holiday travelers spent an average of 14 percent more per trip for 2019 than in years past. (Source: Squaremouth)
  • Holiday Trip cost averaged out to $4,056 per trip in 2019 for those traveling within the U.S. (Source: Squaremouth)
  • Spending on experiences, such as dining in restaurants, accounted for over a quarter of holiday spending in 2019. (Source: Deloitte)
  • 59 percent of all food and beverage spending took place in restaurants. (Source: Deloitte)

Tips to Stay on Budget and Out of Debt This Holiday Season

In order to stay on budget for the holidays, a plan is essential. The following tips will ensure you stay on track and out of credit card debt.

Before You Shop, Make a List

Before you spend a dime, make a list of everyone you intend to buy a gift for. That might not only be your immediate and extended family, but also friends, neighbors, kids’ teachers or coworkers. Then write the dollar limit for how much you can spend on each person.

Use this printable to keep track of every person on your gift list and how much you’ve spent. The two money-related columns—one for your planned budget for each person and one for how much you actually spend—can help you keep track of any leftover funds you might have. If you end up under-budget for one person, note it in your tracker and allocate the money elsewhere.

Holiday gift tracker printable

Don’t Forget Non-Gift Items: Gift Wrap, Ingredients, Decorations, etc.

Gifts aren’t the only thing you should budget for—many other festive costs will likely come up. Buying a Christmas tree, lights and a tree stand can get pricey fast, and that’s just one example. Home decorations, outdoor Christmas lights, gift wrap and holiday meal ingredients should all be accounted for in your holiday budget.

Most people don’t think about their homemade holiday meals when it comes to their budget—considering it’s usually just an extended grocery list, it’s easy to forget how quickly all those extra ingredients add up throughout the season. Instead of letting it sneak up on you, use our menu planning printable to keep up with holiday meal planning and stay on budget. Feel free to print one off per meal or event you need to plan for.

Holiday meal planner printable

Don’t Spend According to Sales: Stick to Your List

There are countless temptations vying for your attention and your wallet during this time of year. Stumbling upon what feels like a once-in-a-lifetime deal inevitably happens more often throughout the holidays, and unless you’re intentional about what you need and can afford, those impulse-spending moments can take a toll on your finances. If you make a commitment to only buy the things on your list, you’ll know exactly where your money is going and won’t be tempted to stray from your plan.

For a bigpicture look at all your holiday spending, use this printable to record your budget for each of your spending categories and keep up with how much you’ve actually spent.

Holiday budget tracker printable

While managing your finances responsibly during the holidays is tough, the process is fairly simple. It all comes down to planning ahead and being intentional about what you can afford.

When you’re proactive about making a budget, you avoid having excessive use of your credit card over the holidays. This can prevent you from accumulating a high credit utilization ratio, which is the result of borrowing too much money from your credit lines.

If you’re unsure of how your credit utilization score is impacting your overall credit, the credit repair counselors at Lexington Law can help you get clear on where you stand before the holiday season is underway.

Give yourself the gift of a stress-free season by protecting yourself from bad credit and staying debt free. Making a plan for your holiday finances ahead of time might be the most rewarding gift you receive all year.


Reviewed by Kenton Arbon, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Kenton Arbon is an Associate Attorney in the Arizona office. Mr. Arbon was born in Bakersfield, California, and grew up in the Northwest. He earned his B.A. in Business Administration, Human Resources Management, while working as an Oregon State Trooper. His interest in the law lead him to relocate to Arizona, attend law school, and graduate from Arizona State College of Law in 2017. Since graduating from law school, Mr. Arbon has worked in multiple compliance domains including anti-money laundering, Medicare Part D, contracts, and debt negotiation. Mr. Arbon is licensed to practice law in Arizona. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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Building an Emergency Fund – Lexington Law

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Most everyone experiences financial difficulties in their lives, and that’s precisely why financial advisors and financial planning experts recommend individuals build an emergency fund. An emergency fund is a personal savings reserve set aside in the event of future unexpected expenses or mishaps.

Emergency funds should always be available as liquid assets so that you can access them at a moment’s notice.

Why Do I Need an Emergency Fund?

While no one wants it to happen, unfortunately, financial hardships or enormous unexpected costs sometimes occur. For example, people are suddenly let go from their jobs due to recessions, or their cars break down or they incur significant medical debts after an accident or diagnosis.

Whatever the reason, the one consistent factor is that these are always a surprise.

According to the 2017 Report on the Economic Well-Being of U.S. Households, approximately 40% of Americans couldn’t cover a $400 emergency. And one in three Americans has zero budget for car repairs. Considering how likely it is that a $400 emergency or car repair will occur at some point within your average year, this is highly concerning.

Without an emergency fund in place, you might turn to dire solutions. For example, you might go to a payday lender, who would have very high interest rates. Or you might not be able to pay rent and be evicted.

Whatever the case, even a small setback, like an unexpected bill, can often send someone spiraling into debt. An emergency fund is like a shock absorber for setbacks in life.

How Much Money Should Be in My Emergency Fund?

There is some debate about exactly how much should be in your emergency fund. Ultimately, it’s an entirely personal decision. For example, someone who is in contract work or works for themselves may want to build an emergency fund that’s larger because their income stream is less reliable than that of a traditional job.

Ideally, you want to have around six months’ worth of living expenses saved up. If you lose your job, it can take you several weeks or months to find a new position. You want to have enough money saved up that you can comfortably handle losing your job or large expenses being thrown your way.

Where Should I Keep My Emergency Fund?

Ideally, you want to keep your emergency fund in a savings account. You don’t want the money locked up in investments. It should be accessible immediately to you, without penalty. You can also make your emergency fund work for you. Put it in a high-interest savings account (HISA) rather than a regular savings account so it earns interest as it sits there.

Another tip to remember is that you should keep your emergency fund in a separate bank or account from your regular accounts. If you see your emergency fund every day, you may be tempted to dip into it for nonemergency situations.

How to Start Building an Emergency Fund

It may feel overwhelming when you think about how to build an emergency fund. However, if you tackle it step by step, the process becomes a lot more manageable.

Set a Reasonable Goal

First, it’s important to set an end goal. When you know what you’re working toward, it’s much easier to track your progress.

Decide how many months of living expenses you want to save up for. Consider factors like your job stability, the amount of your previous unexpected expenses and your risk tolerance. Other variables should be considered too.

If this has been an incredibly expensive year for you, you could choose first to build up three months’ worth and then work your way up after that.

Next, calculate your average monthly living expenses. We suggest opening all your accounts and combing through the last four months. This will give you a rough idea of how much you typically spend per month. Make sure to only include the bare necessities. Then, multiply your desired months by your typical monthly expenses, and you’ll have a goal to work toward.

Make sure your goal is reasonable—if you choose an unattainable goal, you’re more likely to get discouraged along the journey.

Track Your Budget

Next, you will want to figure out a budget and stick to it. You should have an amount you want to set aside for your emergency fund every month so you can meet your desired goal.

Use an app like Mint or YNAB to track your money. That way, if you ever fall short of your goal, you can analyze your spending to see where you can cut back.

Make It Automatic

If you receive direct deposits, you can set up automatic transfers for your savings. This will allow you to regularly contribute to your goal without thinking about it. You also won’t be tempted to spend the money because you won’t see it sitting in your bank account.

Put Away Any “Extra” Money

Chances are, throughout your year, there will be times when you come into some unexpected cash. This could be from birthday presents, bonuses or tax refunds. Make a promise to yourself now that when you get this money, you will put it into your emergency fund.

Sell Something

Take a look around your home and see if there’s anything you can sell. There might be clothes, old electronics or furniture that you can get rid of. This extra income can build an emergency fund much faster (and simultaneously declutter your home).

Modify Your Expenses

Don’t feel like you need to cut out all discretionary spending, because if you budget too aggressively, you might just end up giving up on the project. Instead, choose to eliminate just one thing, like eating out. A small change can add up over the months and help you grow your fund.

And don’t forget to take a look at your fixed expenses to see if there’s room for budget cuts there too.

Reward Yourself (Occasionally)

Building up a large emergency fund will take a lot of discipline and commitment. Over time, as you put all your extra money into your fund, you might start to feel discouraged.

To avoid this situation, set up mini goals along the way. As you achieve these goals, you can reward yourself. For example, every time you hit another 10% milestone toward your final goal, you could treat yourself to a movie night or a Starbucks drink. This will help you have something to look forward to along the journey.

Use Credit Repair to Your Advantage

Credit repair has the power to reduce financial stress and contribute to your overall savings. As your score increases, you’ll be given new advantages you can use to achieve your goal.

  • Interest rates. Better credit equals lower interest rates for your credit cards. If you’re now paying less in interest, you can pass the savings on to your bank account for an instant emergency funding method.
  • Fees. Your budgeting app can set reminders for you so you never incur late fees again. Whatever you save in late fees can go to your emergency fund instead.
  • New benefits and rewards. Individuals with outstanding credit are often given access to the best interest rates and credit accounts. They receive benefits such as frequent flyer miles, cash back and shopping discounts. You can use these perks to continue to save in new ways and build up your emergency fund.

Your Safety Blanket

Your emergency fund is a saving grace when disasters in your life occur. It might be challenging to build it up, but you’ll be glad it’s there once you have it. Make sure to clearly define for yourself what constitutes an emergency.

And, if one occurs, don’t be afraid to dip into the fund. If you do use some of the funds, restart the journey to building it back up. This way, you’re always protected.


Reviewed by Cynthia Thaxton, Lexington Law Firm Attorney. Written by Lexington Law.

Cynthia Thaxton has been with Lexington Law Firm since 2014. She attended The College of William and Mary in Williamsburg, Virginia where she graduated summa cum laude with a degree in International Relations and a minor in Arabic. Cynthia then attended law school at George Mason University School of Law, where she served as Senior Articles Editor of the George Mason Law Review and graduated cum laude. Cynthia is licensed to practice law in Utah and North Carolina.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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