4 Ways to Jump Start Your Emergency Fund | brokeGIRLrich
So many personal finance articles harp on the importance of an emergency savings account. I completely agree, but I feel like for some people, the idea of starting an emergency savings account is like trying to wring blood from a stone.
My emergency savings have saved my butt and opened the door to better opportunities on many occasions:
- It funded a big move so I could take a much higher paying job.
- It’s funded my car insurance a few times, which would’ve really complicated getting to work.
- It’s funded dentist trips.
- It recently funded a completely uninsured trip to the doctor.
And let’s not even get into the peace of mind you have when you’ve got a decent chunk of change sitting in the bank for emergencies. I don’t own a single thing that can compete with that comfort.
Let’s say you’re sold. You’re ready to get started on your own emergency fund. But you have flipped your budget every which way from Sunday and cannot figure out where to find $5 to contribute weekly, much less anything more than that.
If this is the case – $5 a week might be a good starting point for you. Although if you dream big and up it to $25, that will be about $100 a month and by the end of the year you’ll have more than $1,000 saved.
But dreams are dream and not cold, hard cash. So how do you build an emergency fund when your income is absolutely maxed out just trying to survive?
Call and Negotiate All Your Bills
Call each service provider and discuss what you’re currently paying for and if there’s anything you can do to cut back.
Consider some drastic moves like cutting cable TV altogether. If you’re not ready to go whole hog, talk to them about reducing your package. Even if you don’t want to change any coverage you have, ask them for a discount, even if it’s only for a few months, that money can be rerouted to your savings account.
Check in with your car or home owners insurance and see if there’s anything you could do to lower your rates and make sure you’ve already got every discount possible applied.
See if you can make do with a cheaper cell phone plan. Look up your data usage – maybe you never even come close to exceeding a cheaper data plan than the one you have. See if a different provider has a less expensive plan. Consider big changes, like switching to a pay as you go plan or to one of the new discount service providers like Republic Wireless.
Pick Up a Second Job
That’s my “you want me to do another job AFTER this one is done???” face. Trust me. I feel you.
While the thought of going out and doing a second job may seem miserable, think of the benefits of that extra cash, especially if you’re so squeezed for income. Also, know that it’s just for a year (or however long it takes you to reach your savings goal). Some great and flexible side hustles include babysitting, bartending, and mystery shopping.
Automate Your Savings
If you just don’t know how to find those extra $5, let Digit do it for you. Digit connects to your bank account, analyzes your spending patterns and makes tiny withdrawals a few times a week. That money goes into a savings account you can access at any time.
I’ve been using Digit for a few months and I’m always surprised by how quickly it winds up with a decent little balance, that I never even noticed happening! Every time it hits $100, I transfer the money out of my Digit account and into a savings account – like my emergency fund or my down payment savings fund.
The best thing about Digit is that if they analyze your spending wrong and cause an overdraft fee, they will pay it.
Sell Off Some Unused Items
List any items you don’t use around the house anymore on eBay or Craigslist. Make it a goal to list 5 items a week until your emergency account is fully funded. People will seriously buy anything. As a child, I collected pigs. People gave me all sorts of weird, pig items for years. I listed them on eBay a few years ago and they sold for about $50 as a lot. Who’d’ve thought?
I’ve also sold old clothes, shoes, VHS tapes, DVDs, CDs, books – pretty much, you name it, I’ve sold it. Even old broken items can sell well sometimes for parts, just make sure you fully disclose that an item doesn’t work. It helps if you can say why, but even just noting “this doesn’t work and I have no idea why” is a fair listing.
Take some time to make sure your descriptions are clear and accurate. Buyers notice when sellers pay attention to detail.
Great ideas Mel! I need to call and see if I can get my insurance (car) lowered and I need to look into my cell phone plan too. I’ve already cancelled TV and I can’t lower my internet bill because I have to have the pkg I have to get enough speed for my freelancing. I put $20/month (minimum) toward my EF, so about $5 week. It’s not much, but it helps. I am hoping to hit $1500 before the end of the year.
Kayla @ Kat Script recently posted…Model Behavior – I think I missed my calling.
That’s awesome! Slow and steady always gets there eventually.
Nice tips! I am usually not comfortable calling to negotiate with bills, but lately have realized it can be totally worth it. I have sold a few things on Tradesy, and just listed a whole bunch of clothing I know I won’t wear post-baby (tiny miniskirts?! What was I thinking?). I’m hoping to make an extra $50 or so there!
Alexandra @ Real Simple Finances recently posted…Financial Checklist for Baby
Definitely! I called to negotiate my internet last year and they dropped it by $35 for two months and $25 for the next 4.
Selling some unused things and having a side hustle would be the best thing to do. I’m planning to have a garage sale by next month.
Clarisse @ Make Money Your Way recently posted…Get organised: get into HR
Garage sales are awesome – you make some cash AND declutter.
Make sure you save your savings. If you trim the cable bill by $10 a month, automatically transfer that amount into your emergency fund each month.
Also, just realize that small amounts help. Right now, we’ve got some other, bigger goals, which means I can’t dump a bunch of money into the EF to bulk it up. Instead, I put in $50 a month. It’s not enough for me to miss it, but it’s slowly growing the balance.
Abigail @ipickuppennies recently posted…Things a specialist shouldn’t do: laugh
I feel the same way. I stopped stressing over putting a lot in and made putting in $100 a month a goal until it hits $10,000, which will actually be several years. I don’t even make every month, but it’s still growing bit by bit.
Automating has been the best thing for me. Set it and forget it!
Melanie @ Dear Debt recently posted…Dear Debt, This Isnât Working for Me Anymore
Totally didn’t even think of automating! But you’re right, automating is awesome. At my last job I loved that 401(k) contributions just disappeared from my check. I never even noticed it was happening.