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**Easy Ways Grow Your Emergency Fund**
Emergencies happen all the time. Having an emergency fund is crucial in all aspects of your finances. One little unexpected expense could get you in debt or further into debt. It could totally throw you off track with your budget and any other financial goals you may have.
If you don’t have an emergency fund or if you do but do not have sufficient funds save; you need to make this a priority.
What would you do if your vehicle broke down, or one of your major appliances kicked the bucket today? Charge it? Put your tail between your legs and ask a family member to bail you out? Maybe skip paying some bills this month only to be struggling to catch up for months down the road.
Saving money for your emergency fund is not as difficult as you might think. There are plenty of ways that you can add to your emergency savings. You just need to get your mind wrapped around why you need one and how important it is to have one.
Read on to find out what steps to take to set up your emergency fund and how to find easy ways to build it up to where it needs to be.
Steps to take to set up your emergency fund
How much will you need?
Your initial goal should be to build your emergency savings fund to at least $1000. This will ensure you can pay for minor emergencies such as vehicle repairs or appliance replacements.
Your ultimate goal should be to grow your emergency fund so you are prepared for major emergencies as well, such as layoffs or medical issues that might lay you or your spouse up for months. I suggest you grow your emergency fund to cover at least 3 to 6 months of expenses.
Where to stash your savings.
Open a dedicated account that is for your emergency saving only. I suggest you open an account at a bank other than the one you do regular business with. This will make it more inconvenient to dip into your emergency funds for a few bucks here and there.
You can even go one step further and open an online account. I personally opened a Discover Bank online savings account. What I like about having an online account for my emergency savings is that the interest I earn is about 5 times more than at a traditional brick and mortar bank so my savings grow even faster.
Make savings goals
Make a commitment to yourself to start growing an emergency fund now. Set small, manageable goals on how to reach your first $1000. Once your reach that goal make another to reach at least one month’s worth of expenses and so on.
Setting small short term goals to building your emergency fund will help to encourage and motivate you to keep it up. You will be so much better off when an inevitable emergency does arise.
Ways to find money for your emergency fund
Now that you have taken the steps to start an emergency fund, you need to make a plan on how to fund it. I know there are a lot of people out there, who don’t think they can save anything, because they are living paycheck to paycheck or are buried under a mound of debt. The truth is you can do it, even in these circumstances and it is all the more reason you need to start saving.
You will need to think outside the box to find money to grow your emergency savings, especially if your are living paycheck to paycheck. Here are some creative ways you can find money to build your savings.
- Reduce your monthly grocery budget by meal planning and couponing. This is an area where you can easily cut back with a bit of planning.
- Cash in on your clutter by selling items from around the house you don’t need. I’m sure there are plenty of items you can find to sell for extra cash.
- Implement a no spend week where you cut out all non- essential spending. Having a no spend week at least once per month can really add to your emergency fund quickly.
- Reduce your utility expenses. Take shorter showers, lower the temperature on your water heater, and use power strips are all easy ways to cut back on utilities.
- Deposit any found money into your savings, you won’t miss the money you weren’t expecting to have anyways. This could be cash gifts you receive on your birthday, an unexpected bonus from your employer or a return on your income tax.
- Use money saving apps and cashback sites to get money back from purchases you would have made anyways.
- Cut back on wasteful spending such as the high priced coffee runs and eating out. Make your own coffee at home and brown bag it to save a ton for your emergency savings.
- Save all your loose change or use a savings app such as Acorns that rounds up purchases and electronically saves your loose change for you. You won’t even notice that you are saving money.
- Complete surveys online in your free time to easily earn some extra money that can add up quickly.
- Do it yourself, stop spending money for things that you could be doing yourself.
- Create a gift closet to save money throughout the year on gift giving.
- Improve your credit score to save money on interest charges, insurance premiums and much more.
- Automate paying your monthly bills. A Lot of companies offer discounts just for signing up for auto bill pay.
- Sign up for store loyalty programs to take advantage of money saving deals and offers.
- Carpool to work to save on gas and car maintenance.
- Shop around for cheaper rates on insurance, cable, and all monthly expenses to save a bunch on monthly expenses.
- Sell your old, worn and outdated gold jewelry.
- Start a blog to earn extra income in your free time.
- Shop for clothing and household items at consignment and thrift shops. There are plenty of items that you could find that are almost new and you’ll be paying penny’s on the dollar for them.
- Never let food go to waist. Re-purposing leftovers is a great way to save on your weekly grocery bill.
The fact is, there are plenty of ways to find some extra money to build your emergency fund. You need to think outside the box and find creative ways to find extra money. Start with some of these tips and slowly add more saving strategies. Remember, every dollar counts, it may seem like a slow process, but before you know it, you will have a healthy emergency fund.
Do you have any tips you would like to add to this list? Please leave a comment to share with the rest of us.
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