One of the best ways to get your finances in order is to get an emergency fund in place. With an emergency fund, you no longer have to rely on your credit card or overdraft protection to cover those unexpected expenses. And when you work your tail off to build your emergency fund, you’ll be less likely to waste those funds on frivolous purchases. Building our initial emergency fund helps us build momentum, really get the budget thing down and get excited about what we could do with our money. Convinced yet? If so, here are some steps to help you build your emergency fund fast!
1. Set a Balance Goal
Really consider what makes you feel most secure balance wise. For us, we wanted a $1,000 emergency fund while we paid off debt. A lot of people really get hung up on the balance of the emergency fund but don’t overthink it. Some save $500, others save $1,000 and some save two to three times that amount. The whole point of an emergency fund is to begin building some security and making sound financial decisions. I would say that you should save at least $500 and if you have kiddos, at least double that. But set a goal for the amount that feels right for you and your family and then get to work!
P.S. If you’re debt free, you should have an emergency fund that has 3-6 months’ worth of expenses so that you can weather any storm including short stints of unemployment.
2. Set a Budget
I think I tell folks to set a budget every time I write a blog post or interact with them on social media. Why? Because, a budget my friend, is how you determine where your money goes. Ever get to the end of the month and wonder “where did all of my money go?!” Been there, done that! A budget is a simple way to know you were intentional with your money, spent wisely and didn’t spend more than you earn. It doesn’t have to be complicated or constricting. But if you’re an adult with a full-time job, it’s about time you act like one. So get a budget in place pronto! I give away my free budget templates and send you detailed instructions to get started. Now you have no excuse! Click here to grab those templates and start budgeting like a boss.
3. Open a Savings Account
This is an important step to keep your money safe, secure and maybe even away from you! Ok, that last part was harsh BUT if you’re afraid you might spend it, open up that savings account in a bank different than your regular bank. You want to be able to access that money in an emergency but not when there’s a sale on TVs. Make sense?
If you want it all in one spot, open a savings account at your current bank. Don’t worry about a high interest yielding account at this point. Just get this emergency fund in place for now and when you’re ready to save more or invest you can look into some better options.
4. Sell Some Junk
Look up from your device right now for ten seconds and look around your home. I bet you can find at least five items in your home that you could sell for some cold hard cash! I give detailed instructions on how to sell items on Facebook. Click here to check out that article. Seriously, you would be shocked at what people will buy and this is an excellent way to declutter around the home. Regardless, try to sell some items to help you achieve your emergency fund balance goal quicker.
5. Cut Some Expenses
As you worked through your budget, maybe you were shocked to see how much you spend at the grocery store or how much that cell phone bill has cropped up. Whatever it is, do some cutting! There has to be some wiggle room in a few categories. Even if you aren’t sure about the cell phone bill (or whatever bill), call your provider and asked. You might be surprised at what types of discounts they can offer for longtime, loyal customers. You could even threaten to leave if they don’t offer you better rates. A lot of times there are some deals they can provide to keep your business. Shop around for your auto and home insurance and do some work in this area too. I guarantee you’ll be so excited with the results.
6. Get to Work!
Maybe it’s time to increase your income. Ask your employer for some extra hours or get a side job. Regardless of your money goals, increasing your income will help you achieve them a lot quicker! I share some side hustle ideas in this blog post. Just don’t overcomplicate it or overextend yourself. You cannot work 24 hours a day… just get some extra money flowing and put it to work properly.
Now, once you start working on this list and stacking up some extra money make sure that you SAVE that money!!! Remember your goal and remember why you’re working so hard. Don’t sell something for $100 and then convince yourself that you deserve to waste half of that! Keep your eye on the prize and soon you’ll be ready to achieve your next financial goal!
I hope this list helps motivate you to get going on that emergency fund. As always, feel free to reach out to via email or through the contact us form here on the site.
Until next time, spend safely!
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