Tips To Saving Money For An Emergency Fund

Did you know that 60% of Americans don’t have money for an emergency fund of just $1,000 and would have to go into debt to cover it? This amazingly depressing statistic came out late last year and shocked much of the nation. A thousand dollars is nothing when you think about how expensive emergencies like trips to the hospital, your car breaking down, or something in your house needing repaired can be. But a $1,000 emergency can put you into debt for years. This is why many of the top personal finance experts recommend every house have $1,000 set aside as an emergency fund and that they get it right away. Here are some ways for you to get a $1,000 emergency savings saved up fast.

 

Make Cuts to Your Budget for Emergency Funds

Let’s just admit that this is really the last thing any of us want to do. It sucks, but it’s only short term and the peace of mind you’ll have later will allow you to enjoy life even more. The first places to look at making cuts is going out to eat. That includes any Starbucks runs. If you’re spending $5 at Starbucks every day and cut that out for just 200 days, less than a year, you’ve got your $1,000. That’s the amount of time from New Years to the middle of July. And you don’t have to completely give up coffee! Make your coffee at home and buy yourself a reusable travel mug. You’ll still be saving massive amounts of money.

 

Make Some Extra Money

Do you have some unloved toys, clothes, or really anything that doesn’t breathe laying around the house? Sell it online and put that money into your emergency fund! Facebook is an amazing place to do this, I can almost guarantee that no matter where you are in the world there is a local buy and sell group for your area. Other ways to make money is to start up a side hustle. This might mean driving Uber, babysitting (humans or pets), or using apps like TaskRabbit or Handy. There are a ton of different ways to make a little bit of extra cash in a hurry. If after you’ve reached your goal you still enjoy doing it then there’s no reason why you can’t keep going and either build an even bigger emergency fund or start a vacation fund.

Open a New Bank Account

If you keep the money in your regular bank account you’re more likely to spend it so you need to make it a little harder for yourself. This might mean opening a new account with the same bank, but an even better idea is to use an online bank. It usually takes a few days for money to transfer from an online bank, meaning you’re less likely to use your savings to impulse buy. Wherever you decide to make your new account be sure to change the name of it online to Emergency Fund. Seeing that when you have the urge to dip into it might make you reconsider. Another trick you can use is to put money in your emergency fund while you’re paying your bills. If you have promised yourself, and are really dedicated to not going to Starbucks this month then put aside the money you would have usually had in your account that you’d spend on Starbucks in your Emergency Savings right away while you’re paying bills. If you wait until the end of the month you’re more likely to have spent that money on something else. 

Do you have six months of expenses saved? Listen, I know it’s hard but it is certainly necessary. During hard times, it’s nice to know that you have a rainy-day fund. If you don’t start looking at ways that you can save now. You can also get help. I know that the Financial Planners at Prudential will talk with you for free. Let’s work on growing our emergency fund together!

 

[latoyia]