Having an emergency fund…. Just close your eyes and picture that for a minute. Doesn’t it bring a small measure of peace to your heart? Right now, we have our baby emergency fund ($1000) sitting in the bank along with a little extra that we saved when I quit my day job. It’s not quite the 6 months of expenses that I’d like to have, but that little emergency fund makes me relax a little.
I remember what it was like before we had our emergency fund started. EVERYTHING was an emergency! We ended up using credit cards for things like car repairs, because we didn’t have the cash to pay for them. Now that we have the emergency fund, we seem to have fewer emergencies. When we do have an emergency (like an unexpected car repair), we can borrow the money from ourselves, restocking our emergency fund as we’re able.
But how in the world can you start an emergency fund, especially when money is tight? I know that many families are living paycheck-to-paycheck right now, making the thought of saving $1000 look highly unlikely. Been there… done that… have a couple of debts left to pay off to show for it!
Here are five creative ways to start saving money and building that baby emergency fund.
Eat breakfast at home, and pack a lunch.
This one is near and dear to my heart, because it’s the one that I was SO guilty of! When I was working outside the home, I didn’t usually remember to pack my lunch the night before my work days. I was in such a hurry in the morning that breakfast was whatever I could grab. When I was really running late, you would find me driving through McDonald’s or stopping at a convenience store for some breakfast and then eating fast food again for lunch. Not only was that unhealthy for me, it was unhealthy for our budget.
When I remembered to pack a lunch the night before, I was able to save about $5 by not eating lunch out. My packed lunch did cost a little, but nowhere near what I spend at the drive-thru. If I remembered to put something out for breakfast, I was able to avoid spending another $5 in the morning. That’s $10 for every day that I worked. I only worked three days a week, but that’s $30 per week x 52 weeks in the year…. or $1560. Sounds like an emergency fund to me.
Don’t discount the small stuff.
While it might be nice to stop by the bank and deposit $1000 all at once, that’s not usually the way that a baby emergency fund is funded. Instead, it’s funded $5, $10, or $20 at a time. If you can save an extra $5 at the grocery store this week, put it toward your emergency fund. Now you only have $995 to save. If you get a $10 rebate check in the mail, put it toward the emergency fund. Now you only have $985 to save. Chipping away at the $1000 is much easier than trying to come up with $1000 all at once. You’ll be amazed at how quickly those little deposits add up.
If you feel funny about going to the bank to deposit $5 or $10, start an envelope at home. Then, when you reach $50 or whatever you’re comfortable with, go do your deposit.
Designate gifts for the emergency fund.
Do you have family members who buy you gifts for your birthday or Christmas? Let them know that there’s nothing you’d like better than to have an emergency fund. Maybe they would be willing to give you a cash gift instead, and you can add that your emergency fund. I know that there’s nothing I’d like more than to help a friend or family member gain a little peace of mind by contributing to their emergency fund in lieu of a gift.
You can do this with your spouse too, as long as both of you are willing. Skip the gifts for Valentine’s Day, Christmas, and birthdays for a short time, and put what you would have spent toward your emergency fund instead. If your spouse isn’t a fan of shopping, this is also a nice reprieve.
Sell some stuff.
Oh, I know we all have a lot of STUFF. We have stuff we don’t even remember we have. If you’re really serious about building your emergency fund, why not sell some stuff? You could have a garage sale or yard sale if the weather permits. You could list some of your items on eBay or Craigslist. Maybe there’s a consignment store near you. Why not drop off a few things to sell? You may not make a fortune, but wouldn’t it be nice to earn $100 or $250 toward your emergency fund? Plus, you can declutter your house at the same time. Win-win.
Pare it down, even if it’s just for a short time.
I’m talking about lifestyle here. Do you have cable? If you pay $50 a month for cable and you did without it for 6 months, you could put $300 toward your emergency fund. (You could probably also get a sweet deal for re-signing as a new customer with the cable company in six months.) Can you do without your landline and just use your cell phones? Can you cut down the number of times you eat out? Can you take a two-month break from shopping for anything but groceries? If you start to make a list of the things that you can do without – even if it’s for a short time – you might surprise yourself at how much you can afford to put toward an emergency fund.
Having an emergency fund is so important. I can personally attest to the peace of mind that comes from knowing that we have that little cushion between us and life. Once we have our last two debts paid off, we’ll be aggressively saving toward our regular emergency fund (three to six months of living expenses). I can’t wait!
Do you have any other ideas for creatively funding an emergency fund? Do you have an emergency fund? I’d love to hear your thoughts on this topic.
I’m sharing this post at:
:: Works for Me Wednesday hosted by We Are THAT Family
:: Thrifty Thursday hosted by Coupon Teacher
:: Frugal Friday hosted by Life As Mom
:: Finer Things Friday hosted by The Finer Things in Life
I love the idea of putting a small amount. I always think the small purchases won’t make a difference, but they add up so fast!
That’s so true, Amy! Thanks for stopping by.
Great tips for building an emergency fund. In 1998, my husband and I learned the hard way the importance of an emergency fund. We discovered when we had our taxes done that the company hadn’t been withholding the proper amount of taxes and we were going to have to pay. We barely had any savings at all. It was nowhere close to what we needed. We ended up borrowing the money from my parents and vowed to never let that happen again. After that we always kept enough money in savings to cover an emergency. It took several more years before we finally figured out how to really manage our money but the emergency fund helped.
Oh that’s such a hard lesson to learn. But yay for an emergency fund now! What a huge blessing it is.
We are working on ours next! (We have a 0% credit card that expires soon, so we are working on that first!)
You’ll be glad you did! 🙂 It’s nice to have that soft place to land when life happens.
Great ideas, we recently had to deplete our emergency fund ( had only done the $1000 one) and am trying to put that back. Thanks for sharing.
It’s so hard to have to dip into it, but I’m glad that you had the money set aside for the time when you needed it!
Thanks for the reminder to go over my budget again at the end of the month.
Another way to add to the emergency fund is collect change in a jar and deposit it on a regular basis. It may not be much, but even $100 over the course of a year can help.
That’s a great idea Barb! Change does add up quickly. Another great example of how it’s the little things that can get us to our bigger goals. 🙂 Thanks!
I love your ideas! Thanks for sharing! My family really needs this.
You’re welcome, Wanda. Glad that you found something helpful. 🙂
These are great ideas to start or increase the EF. our goal this year is to add $1000 to the EF. That would put it at 2 months of expenses, yay!
Yay! Just knowing that you would be okay for 2 months is such a blessing! Good for you!
we’ve been putting away little amounts of money since right after christmas – so just a month now… and we have $555 as of today saved! In a month! Every dollar – penny even – counts. We put in monetary gifts from christmas, money from consigning clothes, left over money in certain categories of our budget, recycling cans and loose change.
We also saved “a dollar a day” – so a line item in my budget was $31 for a dollar a day; for February it’s $29. That way we’re guaranteed $366 by the end of the year.
Oh Katie! What a FANTASTIC idea! I bet you don’t miss $1 per day like you would if you tried to pop $30 in your fund all at once. Way to go!!
Don’t forget if you’re getting a tax refund, that can help fund an emergency fund, that’s what we’re doing this year, only the baby one plus 600 for medical emergencies.We have a special needs little girl and have to travel for medical care and kind of like this week, thank god we have a little put away, she’s getting an unexpected pacemaker replacement on Tuesday
Great advice Jolene! I hadn’t thought about the tax refund idea. That would be a perfect starting point for the emergency fund. Praying for a smooth procedure to replace the pacemaker. 🙂
Does your family drink pop? Keep those bottles stored for later to return for the deposit. Once a month I get $10 from the pop bottles.
Do you have to pay for parking at work? Find a place close by that you don’t have to pay. The walking is good for you and so is the extra cash! I save $500 a year by parking down the street from work.
Buy fruits and veg that are in season, they are much cheaper.
We got rid of our cable, and we have an extra $75 a month now. Honestly don’t even miss it. You can sign up for Netflix at $7 a month, plenty of entertainment.
Don’t buy name brand groceries. Look to the lower shelves for the no name brand. They are the same product, sometimes with less chemicals, for a better price!
Wow Katie! GREAT ideas! And I agree 100% with the cable. We only miss ours about twice each year. Thank you so much for sharing these with us. 🙂
Oh and I should add, we now have over $8,000 in our emergency fund thanks to all the things I’ve been doing to be frugal. It can totally be done!.
I set my emergency fund for $20,000. Because honestly you just never know what life may throw at you, and I believe you can never be too prepared.
Woo hoo!!! That’s awesome!
Great job! We are working on getting back in the ‘program’ again. It is so hard to keep motivated when spending money like water is the norm. One thing I found helpful is to plan out the budget for the month ahead of the month starting (i am a super procrastinater) the other thing I have found extremley helpful is to plan out the cash demonimations I need to pull before going to the bank (i actually figure it out when doing the budget). This means I can split it into envelopes right at the bank, and I don’t sit at the window feeling like an idiot trying to figure out how many $5s $10s and $20s I need to split the cash properly. ~Kimberlee
Oh that’s soooo true about getting the right denominations at the bank. I ran into that when I would buzz through the ATM to get out the envelope cash. It was all $20s and not every category had a nice round $20 amount to it. Great tips!!