I can’t tell you how many times I’ve been thankful that we’ve had an emergency fund. You never know when something expensive will happen, and having a few months of expenses saved up has really alleviated the stress that comes with those unexpected emergencies. The very basic stage of an emergency fund is saving $1,000. Once you’ve reached that goal, you can start to build up your savings over time – but reaching that first $1,000 is key.
I know what you’re saying: “How on earth can I build up $1,000 . . . we don’t even have $50 at the end of each month to spare!” While all of these suggestions won’t work for everyone, there’s a good chance that you can use a couple to boost your savings and reach that $1,000 faster than you think.
Ways to Build Your Emergency Savings
1. Use your tax return.
I try to shoot for a $1,000 to $1,500 tax return each year. Yes, I know the money isn’t earning interest, but I’d rather get $1,500 back interest-free than make a mistake and pay $1,500!
2. Save your bonus paychecks.
If you’re paid every other week, you’ll receive 26 paychecks each year. That means most months you’ll receive two paychecks, but in two of the 12 months, you get a third paycheck. Plan ahead for the extra check and put that toward your emergency fund. If you make that a goal each time you get that ‘extra’ check, your emergency savings will build faster than you can imagine!
3. Save your Christmas bonus.
If you happen to get a Christmas bonus at work, put that money in your emergency fund. Oh, and by the way, make sure you’re saving for Christmas gifts now so that you don’t raid your emergency fund when that time rolls around.
4. Stop retirement contributions.
I don’t like telling people to not save for retirement, but if you need to stop for a few months to build your emergency fund, I’d recommend that you consider it. Once you’ve reached your goal, start back up as soon as possible. If you’re not saving for retirement, try to start with something small ($15 or $25 a paycheck) and increase it over time.
5. Sell stuff.
We’ve had pretty good luck with making money on eBay. Most of the stuff we’ve sold has been books, but you’d be surprised what people will buy on eBay (like empty iPhone boxes).
6. Get a side job.
I know you’re busy, but if you’re serious about building an emergency fund and the other suggestions just aren’t working for you, then try to look for more income. Whether you’re mowing lawns, cleaning windows, or working a weekend at a restaurant, you can make a few extra dollars and set yourself up for those emergencies that seem to come out of nowhere!
What would you suggest to someone who is trying to build up an emergency fund quickly? Leave a comment!
This article was originally published on FaithandFinance.org.