How to Quickly Build a Starter Emergency Fund

Your air conditioning goes out in August, your tire is flat the morning of a big presentation, or your new puppy thinks your chocolate chip cookies would make a good dessert too.

There are a number of things out of your control that can throw your well-made budget off the rails, especially when you’re trying to pay off debt. That’s why having an emergency fund is so important.

What Is an Emergency Fund?

An emergency fund is a savings account for unexpected large expenses. With an emergency fund, you’re safeguarded against surprise expenses you know will come but aren’t sure when and can’t afford in your regular budget.

Unfortunately, not everyone has an emergency fund. An estimated 60% of Americans would go into debt if they had to cover a $1,000 expense. And that’s after 77% reported having or knowing someone who had an unexpected expense of over $1,000 in the last year.

How Much Money Should You Have in an Emergency Fund?

While a fully funded emergency fund is anywhere from three to nine months of your monthly expenses, you don’t have to make that your goal right out of the gate.

The amount of money you should have depends on a few factors. First is how expensive you predict your emergencies could be. If you’re in a home with older appliances, price out what replacements cost. If you have older pets, ask your vet about the costs of potential services.

Another factor is your job volatility. If you’re a contract or freelance worker, your job is a lot less reliable than a union employee or a teacher with tenure. Three in ten American adults have an income that changes month-to-month. The more uncertain your job is, the more you’ll want to have in your emergency fund.

Lastly, if you’re paying off debt or saving for a big expense that you know is coming quickly, then you’ll want to begin with a starter emergency fund and complete the rest after you’ve accomplished your more time-sensitive financial goals.

Even though money toward other goals can seem more important than letting extra money languish in a bank account, it’s essential to keep your starter emergency fund around $1,000.

Is $1,000 in an Emergency Fund Enough?

To some, a thousand dollars may seem like a fortune. To others, it may not seem like much at all. But it is a solid amount to have saved for your starter emergency fund.

Keeping your starter emergency fund to $1,000 means you won’t spend a lot of time saving it, and you’ll have enough to cover most emergencies like small car repairs, minor medical bills and utility bills.

Expenses larger than $1,000 can often be supplemented with your regular income or paid in installments. The starter emergency fund isn’t meant to be a failsafe, but it will give you peace of mind.

How to Build a Starter Emergency Fund Fast

Ideally, you’ll want to build your starter emergency fund in a month or less. That might seem daunting, but if you break it down that’s $250 for four weeks or less than $34 a day for 30 days.

Even if you don’t have that much wiggle room in your budget right now, there are plenty of ways to make up the difference quickly. Here are seven tips for making and saving money fast, so you can build your starter emergency fund in no time.

1. Sell Your Stuff

A great way to make some extra money without a lot of time or effort is selling stuff you no longer need.

Go through your house room by room and declutter drawers, closets, shelves, etc. While you’re decluttering, set aside the items you think might sell well. Check Facebook Marketplace to see what those items are going for and how long they’ve been listed.

Price your items based on quality and how many of the same item is available locally. Take pictures with good lighting, clean backgrounds and use short, keyword-rich descriptions to sell items quickly.

Furniture, household items, and children’s products tend to do best on the platform but you can have success with almost any gently used items.

2. Make a Meal Plan and Stick to it

Eating at home is the simplest way to cut your spending and free up more money for your emergency fund. But if you’re not careful, you could spend more money on groceries and still end up eating out.

The solution to this is to make a meal plan. Look through your fridge, pantry, and freezer every week to see what you have and what’s about to expire or go bad and plan meals for the week using those ingredients.

For everything else, put it on a grocery list and stick to it. This not only saves you from making impulse buys but makes sure you don’t forget anything that could leave you running to the store midweek. And don’t just opt for takeout!

3. Seek Secondhand First

Instead of hopping in the car and heading to Target as soon as you need something, try to find it used first. Thrift stores, consignment shops, and places like Facebook Marketplaces are full of people trying to get rid of the things your family needs.

If you’re looking for something very specific, you can try asking people in local niche Facebook or Meetup groups if they have a spare or know someone who’s selling one.

Lastly, Buy Nothing Groups and swaps are great places to get things for free. They usually have some rules but if you can participate in one, you’ll find yourself making far fewer trips to stores and saving a lot of money in the process.

4. Use Cash

You can’t spend what you don’t have. While carrying and using cash may seem old fashioned and even a little nerve-racking to some, it’s a surefire way to cut your spending and add more toward your emergency fund.

If you’re going somewhere you know you will be tempted to overspend, leave your credit and debit card at home and carry only the amount of cash you’ve budgeted for. Places that might warrant a cash diet include grocery stores, restaurants, shopping malls, entertainment, and gifts.

Most people equate using a cash budgeting system with a bunch of clunky envelopes, but you can also use a small accordion file, clips, or planner with attached envelopes to hold and separate your bills.

5. Try a Side Hustle

A side hustle is a bigger time commitment than just spending less money, but it can also get you to your goal a lot faster. Because not only do you make extra money with a side hustle, you also limit the amount of time you have to spend money.

When looking for a side hustle, choose one that you’ll actually enjoy doing and makes more than pennies an hour. Try to capitalize on skills you already have if they don’t compete with your main job.

If you’re looking for something different that won’t take much effort to start, there are plenty of apps and websites where you help you find work delivering food, teaching kids English, or walking dogs for extra money in a matter of days.

Ready for the next step? Read this: How to Turn Your Side Hustle Into a Small Business.

6. Cancel Subscriptions

Look at your bank transactions and see how many of those recurring charges you’re actually using. Don’t pay for subscriptions for the person you want to be, only keep the ones that you truthfully use.

And if for some reason you can’t figure out your subscriptions or how to cancel them, there are apps available to alert you of recurring payments and give you the option to cancel in one-click.

That goes for newsletter subscriptions too. Unsubscribe from the ones that tempt you to spend outside your budget even if the deals are stellar.

7. Find Free Things to do on the Weekend

If you’re doing great Monday through Friday then Saturday rolls around and your budget is out the window, all hope isn’t lost. You don’t have to spend money to have a good time. Make a commitment to find free things to do instead.

Check Facebook’s Events to find free events in your area — you’ll even see which of your friends are interested in them. Many cities have a free local newspaper with listings of free events as well. And if there’s nothing going on, have people over for a potluck or cookout.

Maintaining Your Starter Emergency Fund

Once you have your starter emergency fund saved, keep it for emergencies only. Because when there’s a vacation all your friends are going on, it can be tempting to see that $1,000 and pack your bags.

The best way to ensure your emergency fund stays put is to keep it out of sight in a high-yield savings account separate from your regular spending and savings accounts. There are plenty of online options, or you can open an additional account with the bank that has your primary accounts.

Whatever you choose, quickly building a starter emergency fund will be a financial move you will thank yourself for over and over as you head down your journey to financial freedom.

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