For almost every adult, there comes a time when you realize that you need an emergency fund and don't already have one. We all bop along enjoying our salaries and spending the extra until one day it dawns on us that accidents happen. Your car could fail, your plumbing could burst, you or a family member might wind up in the emergency room. At that moment, nothing is more unnerving than realizing that you haven't been saving and that it takes months or years to build up the kind of cushion that you suddenly crave.
Don't worry. With a cool head and a firm grasp of your finances, it's easier to build up an emergency fund than you think. Today, we're here to share our top tips on how to create an emergency fund in a hurry.
Start Setting Aside Savings
Your first step is to create an interest-bearing account and resolve to set aside savings every month. A quickly built emergency fund means nothing if it doesn't grow on itself and refill when you need to spend it.
At the beginning of each month, set aside a specific amount that you want to save and put it in your savings account. This will help you remember not to spend it before the end of the month, ensuring that you really do save some every single month.
Hold a Garage Sale
Most of us have a lot more stuff than we need. That blender you never use, those toys your kids don't play with anymore, that leaf blower you secretly hate. These things have value beyond merely cluttering up your garage and linen closets. Set up a table and pull out everything you haven't used in 6 months and everything you never even opened.
Sort out the premium items that can be sold on for a good price. Unopened appliances are great for this. Artistic pieces and used-but-working appliances can also sometimes be sold on eBay for a satisfactory amount. For everything else, open up your driveway to the neighborhood and hold a garage sale. Garage sales are great because they give you a chance to air out your old things and give them to someone who will appreciate them. Even old baby clothes and cooking gear can find a new home.
Trade a Treat for Savings
Then there are lifestyle ways to save. Try cutting out just one or two treats you give yourself on a regular basis and redirecting what you'd spend toward the emergency fund instead. You can make up for that little morale boost you'd get from the treat with the good comfortable feeling of money in your savings account.
Let's say, for example, you stop for a fancy latte on your way to work every day. Cut that expense out and replace it with buying a bag of gourmet beans for your coffee pot at home, then heading to work with a thermos instead. Dedicate that $5-$15 every morning to your savings and just see how quickly it grows.
Explore One-Time Jobs
You can also explore one-time job opportunities to kickstart your savings account. Babysitting a neighbor's kids for a weekend or petsitting are great ways to get one-off infusions of income to put into savings. But there are all sorts of one-time income opportunities out there depending on the life you lead and what you care to offer. Keep your eyes and ears open and you may find more than a few ways to build up your emergency fund quickly.
Find Your Sharing Economy Niche
Many have found success using their own hobbies as an income source through the sharing economy. Some sell the jewelry they make on Etsy, some rent a spare bedroom as an Airbnb suite, some bake pies and deliver them to locals in the city. What you can do in the sharing economy depends on what you enjoy doing and what others will pay for.
If you're not sure where to start, consider taking a look around multi-purpose sites like TaskRabbit. Here, people with needs meet people with energy to get all sorts of tasks done. From light cleaning to running errands to building backyard storage sheds.
Start a Change Jar
If your lifestyle includes the occasional handling of cash, a change jar can also be a good way to jumpstart an emergency savings account. Over time, a change jar can build up coins and small bills until there are a few hundred dollars inside. Especially if you choose a large jar to start with. Then you simply take your jar to the nearest Coinstar (or equivalent) to transfer it into easily collected funds.
Direct Your Monthly Remainder to Savings
Finally, remember to clear the remainder in your checking account at the end of each month. Know your account minimum (most banks prefer you keep your checking above $50 at all times) and any amount above that, direct the excess into your savings. This way, any successful saving you did by cutting costs during the month immediately benefit the size of your savings account.
Building up an emergency savings account isn't as difficult as you might think. No matter the reason you decided to save, with these tricks you can build a significant amount in a surprisingly short amount of time. For more everyday financial insights, contact us today!