Last updated on August 23rd, 2022 at 10:50 am
Building an emergency fund is a goal that everyone can relate to. Emergencies are unpredictable, but they always seem to pop up at the worst times. If you’re living paycheck-to-paycheck and you have no savings for emergencies, it’s time to build one as quickly as possible. Here are simple steps to help you get started:
- Set Up Standard Savings Transfers
Set up automatic transfers from your savings account to your checking account to build your emergency fund faster. This will ensure that money is always available for an emergency and won’t be eaten away by the fees associated with keeping a large amount of cash on hand.
If you have multiple accounts, consider setting up automatic transfers from one account to another: for example, automatically moving $100 from your retirement account every week if you meet a goal during the month.
- Save $1 on the First Week
Another step to building your emergency fund is saving $1. This might seem like a lot of money when you’re used to living paycheck-to-paycheck, but it’s not impossible to achieve. You can save this much by doing the following:
- Saving $1 for a week
- Saving $1 per day for a week (a total of 7 days)
- Saving $1 per day for one month; that’s 30 days
- Save $3 on the Second Week
You could also increase your savings rate by taking it to the next level and saving $3 the second week. This would mean setting aside $13 a month for an emergency fund, which is still a great start. Goals help you achieve what you want. If you have no goal, it’s easy to get sidetracked by life events or even just forget about your savings plan because there isn’t anything keeping it top of mind. Setting goals can be saving for tuition fees or buying life insurance for your family. These goals help keep you motivated when times are tough and remind you of why you’re working so hard to create security for yourself and your family during these difficult times.
- Save $7 a Week for Seven Weeks
You can save $7 a week for seven weeks and build an emergency fund. It’s not hard, but it does take some effort. If you are going to build a savings account, then you should give yourself a challenge and see if you can do it. This is all about taking on challenges and making things fun and seeing if you can save $7 per week for seven weeks (that’s $49) and it’s quite a lot to help you when an emergency time is needed.
- Start with Saving 10% of Your Income
10% of your income is a good starting point. When you’re just getting started with saving money, this is a great goal to shoot for. You can then adjust the percentage based on your income and needs as time goes on.
This may seem like a lot, but it’s important to remember that if you don’t start somewhere and make sure your emergency fund has some cash in it, then any future savings will be more difficult to attain.
- Save Half of Your Tax Refund
If you get a tax refund, save half of it. It’s tempting to use that extra money for the fun stuff, especially if you got a large refund. So, put half toward something more practical like paying off debt or building an emergency fund.
You can also use the other half to pay off an upcoming credit card bill and one with a balance of less than $500, ideally. That way, you won’t be tempted by those low minimum monthly payments and end up paying more in interest over time than if you had just paid the full amount upfront when your statement came due.
- Selling Stuff in Your House
To speed up the process, consider selling some of your stuff to make extra cash. This can be done in small steps over time or all at once if you have several items that are no longer used or needed. The key here is to just get started; once you begin saving money, then you’ll find things in your house that could bring in extra cash if sold via online websites. For example:
- Your old cell phone: If it still works and has no damage, sell it for some extra cash. Just search online for what other people are selling their devices for and compare prices from different sites so that you get the best deal possible.
- Your old car: If it’s not worth much on its own but could be useful as parts, consider taking its parts off before selling it or donating them somewhere else where they will be put back into good use instead of being thrown away completely because nobody wanted them either way.
If you’re looking for ways to make saving money more accessible, these tips should help you to make it faster in saving up. Building up an emergency fund is a smart move for anyone who doesn’t have one already. It’s not super complicated, but it does take some time, so don’t give up.