6 Quick Ways to Create an Emergency Fund

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.

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  1. Kat

    Regarding suggestion #2 (bonus paychecks)…Actually, if you get paid every other week, you only receive 2 of these extra paychecks a year. (52/2 = 26, 26/12 = 2 and 2 left over). But still, two is better than none, and these can certainly go to an unfunded emergency fund!

    Saving any bonuses/overtime pay towards the emergency fund would also help build a healthy balance quickly since ideally we budget for planned income, not “bonus”.

    • John Frainee

      Kat, thanks for pointing this out! We’ve corrected the math.

  2. Michelle

    These are all great ways to save. I’m working on beefing up our EF by working a lot!

  3. FI Pilgrim

    The importance of an emergency fund can’t be overstated, thanks for these suggestions! For us it took saying “no” to quite a few things we had planned to buy in order to grow our emergency fund, but now it’s much easier to spend the money we plan to!

  4. China Newz

    Emergency funds should aim to cover six months of expenses right? In case you or your spouse lose a job, you need to be prepared to weather the storm. Surely, that would cover other miscellaneous expenses as well that would fall under that six month budget.

  5. Rocky

    Great post! NOT having a basic emergency fund was what caused my family to go into debt. We didn’t buy toys, we just didn’t have any safety net for INEVITABLE emergencies. I think we have used each of your suggestions to either build or replenish our “baby” emergency fund. Another idea would be to create something to sell at your local Farmer’s Market. They are in full swing right now and will likely be running for 6 more weeks or so, in our area anyway. They are often free to join, and have lots of curious shoppers that are looking for hand made, home grown stuff. Thanks for the article!

  6. jim

    Nicely done. Great article – again!

  7. Brian @ Luke1428

    These are great suggestions. Reducing expenditures for a time could also help beef up an emergency fund quickly. There are many things we could cut back on for a time that are not necessities to life.

  8. Dena

    These tips are very helpful. It is extremely important to have money available for unexpected emergencies.

    I’d like to share what my husband and I have done for the past 6 years. We still live off what we made in 2007. When I record our paychecks in our passbook, I use the income we had then and take the additional and put it in our emergency fund. It has grown to an additional $230 a month which is current. If my husband is given the opportunity to work overtime, we also put that in there as well. Anything over $10,000 is used for vacations, etc.

    The neat thing is that we really didn’t miss our “raises” because they were never figured in. We just learned to live on the same income.

    • katherine

      Great Idea..never thought if that..have to look at old pay stubs..I do have an EF but not 6 months worth, more like 3 months.

  9. debtfreeoneday

    I have a smallish emergency fund (around $700), which I saved up before attacking my debt. I found it hard not to just pay it off the debts straightaway but I’m glad I didn’t now as I’ve had to dip into a few times already. I saved every penny and sold stuff on Ebay until I had enough saved.

  10. Chris

    These are all great ideas! I just wanted you to know that I attempted your suggestion of selling stuff on eBay including old iPhone boxes. Apparently selling things like iPhone boxes on a site like eBay is a trademark violation as my listing of them was removed. Just a heads up for those who might be thinking of doing the same.