How to Build an Emergency Fund

7 Tips for How to Save an Emergency Fund

I hear people say all the time – I can’t save because I’m terrible with money.  I don’t handle the bills because I suck at money or I’ll never be able to get out of debt because I suck at money.  But guess what?  You don’t actually “suck at money”.  You just need some simple tips and skills to get you moving in the right direction.  And one of the best things you can do is save an emergency fund!

First, let’s decide if you even need an emergency fund.  Do any of the following apply to you?

  • In your lifetime, has there been an emergency that you needed cash for now and you didn’t have any?
  • Are you in debt?
  • Are you tired of being in debt?
  • Do you feel like you take one step forward and three steps backward every time you get paid?
  • If you lost your job, would you be stranded with zero savings?
    7 tips for saving an emergency fund you can't miss. Get control of your money quickly #savingmoney #money #savings

If any of the above apply, then you need an emergency fund and pronto!how to save an emergency fund

How to Build An Emergency Fund Quickly

Sometimes it’s hard to even think of getting an emergency fund when you’re living paycheck to paycheck.  How in the world are you supposed to save money when there’s nothing left over at the end of the month?  Or maybe you’ve been trying, but you just don’t know what to do so you give up. First things first – breathe. It’s possible and you can do it.

Right now we aren’t focused on your debts.  We need to focus on getting a savings account so you can avoid going into more debt when an unexpected emergency happens. 

And by emergency, I mean emergency. 

This is not for a weekend trip or a new outfit just because you have an event to attend. This is a true emergency fund and you need to treat it like that.  It’s pretty much untouchable unless it’s unavoidable. It’s not punishment – it’s a lifeline for your finances.

How much do you need for emergency savings?

There’s a lot of conflicting ideas on how much you need in an emergency fund.  $1000 seems to be a common number.  And I think that’s a great start.  However, oftentimes, emergencies are more than $1000.  Your car needs a major repair, the A/C goes out in the middle of summer, or your kid needs a medical procedure.  Those events are often in excess of $1000.

But if you can manage to save $1000, then I think you’ll develop some habits that will enable you to save even more and add to that fund.  So we’ll start there.  I know $1000 seems impossible to some.  It’s a large chunk of money if you’re starting from zero.  But you’ve got this!  And here’s how!Fundamental steps to saving an emergency fund

Stop Spending Money

You won’t be able to save money if you’re continuing to spend. I don’t mean necessities. You’re still going to eat and put gas in the car.  But anything that’s not a necessity at the moment gets put on hold.  Clothes – you probably have enough.  Toys for the kids – unlikely that they need any right now.  It’s not forever.  But you can’t save the money if it’s continually going away to things you don’t need.  

Commit to it.

Tell yourself out loud that you won’t buy it if you don’t need it.  If you’re a sucker for Target dollar spot – stay out of Target.  If the UPS person sees you every day when they bring your Amazon Prime packages, stay off Amazon.  Or if you love decorating your house for every season, tell yourself that you’ll shop your house and make do with what you have for now. 

Are you a fabulous cook and love to try out new recipes?  That’s fantastic because eating at home is often cheaper, but maybe it can be scaled back a bit for now.  If groceries are your spending downfall, read these 4 easy tips to save money on groceries.  

If you’ve got a spending trigger – avoid it like the plague.  This might mean staying out of stores and off the online shopping for a bit.  Figure out ways to curb your spending no matter how hard it may seem. 

Write Out Your Savings Goal

Make yourself a notebook, spreadsheet, dry erase board, savings app – whatever you want.  But write it down.  If you’ve got kids that are old enough to understand, get them involved. It’ll be helpful if everyone is on board with the plan. 

Today is the day that you’re changing your financial life.  You’re obviously determined if you’re reading this.  You want changes and are willing to do whatever it takes to get there.

Give yourself a “why” or a reason for doing this.

I don’t want to go in debt anymore, I want to teach my kids how to be financially responsible, or I just want peace of mind.  Pick out why this is important to you and write it down.  It might sound silly at first, but it’s really not.

Think about it – if you’re told over and over again that you’re amazing – you might start to actually think it.  If you tell yourself that you suck at money and just can’t do it – you’ll believe that too. Tell yourself you can do this.  You’ll get this emergency fund.  It’s on.  Tell yourself that enough times and you might just start to believe it!   

Put a sticky note on your bathroom mirror so you see the goal first thing in the morning.  

Find a friend or family member that’ll be supportive and tell them your goal.  It helps to have a cheering section when you’re starting something new.  Find a few people that’ll be supportive of your goals and who will understand when you have to pass on the next shopping trip or dinner.  

Open an Account Just for Your Emergency Fund

If you’re trying hard to dig out of a hole, it won’t be a good idea to just try and keep this money in your normal bank account.  It needs to live somewhere else.  Open a savings account online or at your bank that doesn’t have a debit card attached to it. 

You need to be able to get to the money, but not as accessible as your debit card.  There are tons of online options that don’t require a minimum deposit amount. Capital One and Discover are two that I’ve used with no problems.  Most savings accounts won’t earn you loads of interest, but these two, in particular, are better than others I’ve found.  Do some research as these things change frequently.  

You can open an account and make your initial deposit and then it’s easy to transfer money to that account for your savings.  Most of these accounts even have an automatic draft option that may be a good fit for you.  If it’s gone from your paycheck before you even have a chance to spend it, you’re less likely to miss it!

I’m terrible with cash.  It just seems to slip through my fingers like water.  So for me, keeping a stash of bills is not effective.  It’s better for me to have an account that isn’t readily accessible.  It’s like freezing your credit cards literally in the freezer.  They’re hard to get to so you think twice about using them.  

And it gives you a sense of accomplishment to check the balance and see it growing.  No amount is too small.  Even if all you have is $20 to add at first, it’s $20 more than you had when you started.  Figure out what works best for you and get going.  But just give your savings somewhere to live that you won’t be tempted to spend it. 

Sell Unwanted Items

You might be thinking, how the heck am I supposed to save money if I’m flat broke?  If there’s zero money left after your paycheck, start by trying to earn extra money.  Look around your house and see if there’s anything you can sell.  Even if it’s only $20 here and $50 there, that money will add up and it won’t come out of your paycheck. 

Do you have tons of kids toys that they aren’t playing with?  Join an online selling group and start unloading stuff.  It’s a hassle sometimes, but you’ll be amazed at what other people want that you have!

Do you have some random furniture sitting around just collecting dust?  Sell it.  Bags of clothing that you don’t wear.  Try and sell them.  Did you have grand intentions of learning how to use that fancy camera, but never did?  If it’s something that you have zero use for anymore, sell it.  

One tip about selling things online I’ve found that works wonders.  Take a good pic and stage your items.  If you’re selling a cute little table, style it first.  People like to envision something in their own home.  Add some pretty decor (sell the decor too if you want), but make it look appealing.  A dark and dingy photo of a dirty table likely won’t sell.  Get a pretty pic and make some cash!

And be realistic about your pricing.  I know it’s hard to let things go for much less than you paid.  But you’re trying to make quick cash.  Don’t give it away, but realize you won’t get what you paid most likely.  And if you’re not using it anyway, something is better than nothing. 

Cut Out One Thing Each Week You Don’t Need

Do you go to Starbucks every day on the way to work?  Make coffee at home and save yourself that $5 each day.  That’ll add up quickly!  Bring your lunch to work instead of eating out.  Cut the sodas and drink water.  Don’t think just because it’s not a huge sum of money at one time that it won’t count.  If you save $5 three times a week, that’s $60 each month towards your fund without even doing a budget!

Do you meet for drinks after work several times a week?  Skip a few of those and pocket that money.  Think of anything you spend money on that’s not a necessity and pick something that you can do without until you’ve got your emergency fund in place.  Again – it’s not forever.  But if there’s not any money left out of your paycheck each week, something has to go.

If you’re spending hundreds of dollars each month on eating out, that’s an easy way to build up some quick savings.  Cut out or drastically cut down the restaurant meals and that money can go to your emergency fund. 

Find a Way to Earn More Money

If you’re already working, can you pick up an extra shift?  I know it’s not always possible in every field, but if you have that option, take advantage of it.  Do you have a skill or talent that could earn you money?  Babysit, clean houses, do yard work, take overtime if possible – whatever you can do quickly that will add up. 

This is different for everyone depending on your situation, but sit down and think of one way you can earn an extra $50 or $100.  And remember it’s not forever.  It might not be fun temporarily but, think back to your goal and your “why”.

Everyone’s situation is different.  What works for one might not work for someone else.  A single parent may not be able to add a second job due to childcare issues.  A college student might struggle to work around a class schedule.  But there are ways.   Find yourself a side hustle that works for you!

  • I know a student that is full time in school, part-time at a regular job, and also has a bartending job.  Does she love working till 3 am?  Probably not, but it brings in the cash. 
  • Or another person I know works around 35 hours a week at her regular job, but then also cleans houses on the side for extra income. 
  • A stay at home mom that teaches English to children. 
  • One guy I know signed up to drive for Lyft and Uber and he’s bringing in hundreds of extra dollars each month. 
  • If you’re a stay at home mom, could you offer childcare to someone that needs help?  Could you do yardwork for someone that is no longer able?  
  • Can you walk dogs for someone that works all day?  

I know none of these options alone are going to bring in thousands of dollars.  But combined with everything else you’ll be doing to save for your emergency fund, it’ll help!  The point is to find some way to earn some extra money to get your $1000 emergency fund quickly. 

Don’t Touch the Money!

Once you’ve done all the above steps and started adding to your emergency savings fund, don’t touch it!  Unless you have a true emergency.  It’s a safety net for those times that you have an urgent situation.  If you aren’t sure if it’s a true emergency, think to yourself, can I do without it?  Do I actually need it? And is it worth starting over from zero for my savings? 

If your car breaks down and you can’t get to work unless you fix it, that’s an emergency.  If your pipes burst and you’ve got water pouring into your house, that’s an emergency.  You owe money on taxes – emergency. 

If you’re at Target and you see that gorgeous new vase or pillow – not an emergency.  Or if you’ve got food at home to cook, but would rather eat out – not an emergency.  You want those fancy new workout pants – not an emergency.  

If you stop and think about a purchase before you actually go through with it, most of the time, you’ll skip it.  It takes time to change your habits.  And this is like trying to eat healthier.  Just because you blow it one meal doesn’t mean you’re doomed forever.  If you mess up and buy something you don’t need, first, see if you can return it.  If not, move on. 

You’ll make mistakes.  It’s ok, but you can do this!  Think about the feeling of peace you’ll have knowing you have an emergency fund in place.  That’s the first step in getting your finances in order.  If you’re in debt and continually adding to the debt, it’s time to make some changes.  

Building an Emergency Fund

  • Stop spending money
  • Write out your savings goals
  • Open an account just for your savings
  • Sell unwanted items
  • Eliminate unnecessary expenses from your weekly/monthly budget
  • Find ways to earn extra money
  • Don’t touch the money!

For More Ideas on Saving Money and Creating Good Money Habits:

10 Budget Tips You Need to Know

5 Things to Teach Children About Money

Why You Absolutely Need a Christmas Budget in January

4 Tips for Saving Money On Groceries

If you’re just starting out, send me a message and let me know your wins!  No win is too small.  First $20 in savings – win!!  You’re on your way.  You can do it!  I’m looking for success stories and people that are just starting on their financial journey.  Contact us with your story – I’d love to share it and inspire others!

Pin for Later!Fundamental steps you need to save an emergency fund - get your finances under control! #howtosavemoney #savingmoney #emergencyfund


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