You hear it all the time, you need to have an emergency fund for those mishaps that occur in life. But the question is: How do you build an emergency fund on a budget?
What is an Emergency Fund?
It's a sum of money (like a $1,000 starter emergency fund or 3-6 months of expenses) that is set aside for an unexpected expense, a financial shortfall, or other unexpected situation. Most consumers prefer to have an emergency fund setup in the form of a savings or money market account, but how you set aside this sum of money is completely based on what works for your household.
Here are some simple ways to build up money without stressing out or sacrificing the necessities in life:
Grocery Shopping Adjustments
Most households spend the brunt of their non-fixed expenses on groceries. Take advantage of meal planning and matching coupons to store sales to fully create a consistent savings in your grocery bill. The money you save by using a more organized shopping list needs to be deposited into that emergency fund account.
Sell Things You Don’t Need
With online garage sale groups on Facebook and online platforms that make it free to sell your stuff, there is no reason why you can’t pick up a little extra cash for your emergency fund by selling things you don’t need. Do a little cleaning and organizing of your home to make a pile of items you could sell to build up some fast cash and then put that money into your emergency fund account.
Find Ways to Make Money from Home
Anyone can make a little extra cash from home without any major skill sets: find legit online paid survey sites, pick up a part time marketing gig, surf Craigslist to find people who need you to run an errand. There are so many ways to earn a little extra money from home, and all that extra cash needs to be immediately placed into your emergency fund account.
Negotiate Lower Rates
Most credit cards and even your utilities can be negotiated down to a better deal (like when I negotiated our satellite TV bill to half of what it was previously). Research ways to cut your current monthly bill rates by using services such as BillCutterz and then use that extra cash you save as another boost of money for your emergency fund.
No matter how tedious, time consuming or overwhelming it may seem to build your emergency fund; one thing is for certain, when you see the cash getting higher and higher as you implement the strategies listed above, you will start to feel more self-confident and successful as you reach your emergency fund goals.