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How To Find Money To Build An Emergency Savings Fast
Building an emergency savings is key to being financially stable and getting out of debt or staying out of debt. Whether you are living paycheck to paycheck or in debt up to your ears, you need to build your emergency saving!
I know, I’ve been there, if you are in these situations, saving is the last thing that you think you should be doing, all you have on your mind is how to get the bills paid or what in the world can you do to get out of debt.
The truth is that you need to build an emergency savings before thinking about any of those things. When you are struggling financially, the first thing you need to do is build your emergency savings because no budget or debt reduction plan will help you when you have no money and something unexpected happens.
You never know when an emergency will happen, there is no other way to plan for it besides having the money to pay for it when it happens. Here are some ways that will help you build your emergency savings fast so you can get it over with and concentrate on other areas of your finances that need attention.
Open a dedicated emergency fund account
The first step you need to take is open a savings account that is dedicated to this emergency money. Preferably at a bank that you do not do regular business with so it is a bit more inconvenient to get to that fund for non-essential purposes, or to transfer money into you checking for silly reasons.
This money is for an emergency! You should not touch it unless it is an emergency! You should also opt out of getting a debit or ATM card for this account. The harder it is to get your hands on that money the better. Try putting your money into an online bank that offers a higher interest rate than your local bank.
I use CIT Bank for my emergency savings because they pay more in interests than any other bank so my money keeps growing.
It all Starts with a Budget
The next step is to create a budget if you don’t already have one. I know many people hate to budget but it is truly the only way to manage your money effectively instead of your money managing you, what you can and can not do and how you live your life.
Take the time to sit down and create a budget, make sure you include every single thing you need to in your budget. This is really important because the one thing that causes people to fail at budgeting is because expenses seem to pop up all the time that they hadn’t included in their budget.
The thing is, most of these extra expenses are things that they knew needed to be paid but just weren’t considered when creating their budget. Read One Simple Reason You Fail At Budgeting for more help to create a budget that includes everything necessary for a successful budget.
Find money to fund your account
Next, go through your budget and see where you can squeeze a bit of extra cash out contribute to your emergency savings. If you can do that, you are on the right track, just an extra $20 or $50 a week will do wonders. If not, you’re going to have to make it happen. Here are a few tips…
Cutting out non-essential expenses
Cut out any non-essential expenses, cancel any subscriptions or services that you are paying for that are not essential. Go through all your bills and bank statements and cancel anything that you don’t absolutely need. Any money saved here can go directly into building your emergency saving up.
Cutting back on essentials
Just because an expense is essential, doesn’t mean you can’t find ways to reduce those expenses. Take your grocery budget, for instance, there are many ways you can save money on your grocery budget, in fact, this is one of the easiest places to squeeze money out of your necessary expenses.
My friend Erin of $5 meal plan has an awesome course called Grocery Budget Makeover that can help you out here if you don’t know where to start. This is a self-paced course and trust me when I say that you will literally be able to save the cost of this course, in grocery spending, on your first trip if you implement the strategies you learn.
Don’t just stop at your grocery budget, how about shopping around for a better price on insurance that you need or bundling to save more money. Has your credit score improved in the last year or so? Maybe you can rework your vehicle or home loan with a better interest rate.
You can even call your credit card companies and ask for a better rate. If your creditors don’t want to work with you, then transfer your balances into a lower interest rate card. How about reducing energy consumption to save money? You can save quite a bit of money by doing little things to reduce your utility bills. Check out 13 Painless Ways To Reduce Your Energy Bills for more info.
Earning Extra Money
How about making extra money by finding a side gig? Do you have a hobby or talent that can earn you a bit of money on the side? What about having a garage sale or selling a few items online to help out? Cash In On Clutter is a great resource to make money by selling unneeded items that you have lying around the house.
Passive Income is one of my favorite ways to make money. In case you don’t know, passive income is when you put in some upfront work that has the potential to bring in money for years to come. You can read how I make passive income every month and find some great ideas that you can do in my article 23 Passive Income Ideas To Grow Your Income.
The options to bring in more money are truly limitless, you just need to think out of the box and take action!!
Once you have $1000
Once you’ve built your savings up to at least $1000, you can pull back a bit and start using some of the money you have been using to fund your emergency saving to start paying down debt. But you need to keep on adding to your emergency fund.
It is best to get enough money in your emergency fund to cover at least 3 months of expenses. So keep at it, you will be so happy you did when an unexpected financial expense arises.
What creative ways have you come up with to fund your emergency savings? Please leave a comment to share.
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How To Find Money To Build An Emergency Savings Fast