As we all (hopefully) stay home to ensure our physical safety we should take time to make sure we have a financial safety net. An emergency fund is just as necessary as food, shelter, and clothing. You NEED one! About 7 out of 10 people cannot afford a $1,000 emergency. Do you fall in this statistic? If you do, don’t be ashamed! You can make a change. Keep reading to learn how to build an emergency fund fast.
Set Your Emergency Fund Goals
Many guides, resources, and experts suggest 3-6 months worth of expenses in an emergency fund. This can be overwhelming when you’re just starting out. The first time I learned about saving an emergency fund I set my goal at $1,000. At that time it was for my son and me so with a household of just two I felt that was an appropriate number to start with and build upon. This is why I remind you that personal finance is personal. Select an amount that you can work towards without feeling overwhelmed and discouraged. Once you reach that goal you can increase it and keep saving until you hit the 3-6 month expenses mark. Having something saved is better than nothing saved.
Check Your Budget
Take a look at where your money is going. If you don’t have a budget you need to create one ASAP. Track your expenses from the prior weeks and/or months and see where your money has been going. How much of that can you allocate to an emergency fund? You will have to have an honest conversation with yourself about needs vs. wants and believe me, an emergency fund is a need. Prioritize it in your budget by paying yourself first and adding extra as noted on the Money & Momming Budget Sheet.
When I need to make cuts to my budget the first thing I look at is how much I’m spending on eating out. That’s always the first cut for me because that is where I easily spend the most unnecessary money. When you track your expenses you get a detailed look at what exactly you’ve been spending on and you can make an informed decision. Again, this will take an honest assessment of needs vs. wants in order to make these changes to your spending and get serious about saving.
Ebay, Facebook, Poshmark, Offer Up, or an old fashioned yard sale– all legit ways to get rid of things you don’t need and make some fast cash. I’ve mainly sold items on Poshmark or took my kid’s old clothes to a consignment shop when he grows out of them. Not only will you be making a few dollars it also helps you declutter and get better organized. Do you have a bike you don’t ride? Sell it. Picture frames that still have the manufacturer photos in them? Sell them. If you don’t use it and it’s in decent condition take a chance at selling the item.
Use Cash Back Apps
Did you know there are several apps that allow you to scan your receipts for cash back or rewards in the form of gift cards or coupons? Fetch, Shopkicks, and Ibotta are all great apps to start with. Any money saved or earned can be contributed to your emergency fund.
Jasmine, the Founder and CEO of Money & Momming is based in New Jersey. Jasmine is wife, mom, and works full time as a supplier quality engineer in the aerospace industry.