With the souring economy, people are realizing that they really need to find ways to save more money.
One way to do that is to initiate a "pay-to-use" program, which is fairly simple. When you use, say, an appliance that you own, you pay a predetermined amount to your emergency fund.
For example, if you did not own a washing machine or dryer, you would have to go to your local laundromat to wash and dry your clothes. In order to use the machines there, you would have to pay for each load you washed.
When setting up a pay-to-use system, you simply pay yourself for using the machines you already own, rather than the laundromat owner.
In the above example, you might decide to pay a dollar toward your emergency fund each time you wash your clothes. You might also decide to add two dollars to your emergency fund for every laundry load that you placed into your dryer.
By making small payments for the appliances you use, your emergency fund should start to fill up quite quickly.
Even better, you'll develop additional skills that will boost your budgeting and personal finance skills. Here are just a few benefits of pay-to-use.
It teaches details about your spending.
People often think about spending in terms of shopping, but every time you turn on a light or get into the car, you are spending a little bit of money. Most people probably aren't aware of how often they use many of the appliances and other items they own, but a pay-to-use program will clearly show you.
It creates better organization.
A funny thing happens when you have to pay each time you use something that you already own. You begin to organize your life so that you don't have to use those things as often.
It makes you rein in your impulses.
When you have to pay up-front to do things you normally do without a thought, you're likely to take a minute to question whether you really need or want to do it.
If you must pay $5 to watch an extra hour of TV, you're likely to reflect on whether the TV show is worth that much money, when otherwise you would just flop down and watch without thinking.
It will change your habits (for the better).
When you adopt a pay-to-use savings program, you will notice that your habits change. Just like $4-a-gallon gas changes driving habits so you don't waste as much gas, you will notice that you will begin making changes to your lifestyle that will help reduce the amount that you spend.
You'll learn what is important and what things are worth to you. Finding out this information is a good way to find out which costs you can eliminate without them causing much heartache.
It will reduce your spending.
Not only will you be creating a stash of cash, you'll also be reducing your spending at the same time.
If you set up the system correctly, you'll probably charge yourself to do things that cost money, time and energy, or are wastes of time.
For the pay-to-use system to be successful, you need to pay the cash to your fund as soon as you do whatever it is you have to pay to do. If you simply write down the amount you owe or tell yourself that you will pay it later, the system will fail.
One easy way to make sure that you pay is to set up a central piggy bank or money jar in a well-trafficked area of your house where all payments should be deposited. Once a week or so, you can take the proceeds to the bank and deposit them into your emergency fund account.
Include all your family members when setting up this program. The system works best as a family unit, rather than a single person within the family.
Jeffrey Strain has been a freelance personal finance writer for the past 10 years helping people save money and get their finances in order. He currently owns and runs SavingAdvice.com.