How to Start Building an Emergency Fund?
Last week I talked about creating an emergency fund and why it is so important. Now let’s talk about how to jump in and get started.
How much should you save? This is an easy, yet highly individual question. Depending on how out of out of debt you already are and what the job market is in your field and area. Generally I would say 3-6 months is a safe bet, but 6-9 is probably best. Take a hard look at your budget and decide what your needs in an emergency savings fund. What could you drop? What would be added in? Now figure out how many months you are saving and start planning! For our family, we have to repay our “emergency” emergency loan from family first, then start in on building a future fund so we aren’t stuck again.
We have implemented a game plan to start a new emergency fund using my husband’s previously mocked (by me) savings account. Maybe some of our ideas can help you start one too!
Sell your stuff.
One of the best things about our house having to be gutted is that everything ended up in boxes. What a great time to go through everything and then things out. Garage sales, eBay, Facebook selling groups, and craigslist take a little bit of extra work that can be a great source of emergency income. Not to mention the amazing feeling of purging the old stuff out of your house and streamlining to build towards a better future.
Donate blood: Okay, I know this sounds a little extreme, but hear me out. My husband has the universal donor blood type and it is very important that he donates. In our area there is an added incentive to saving many lives with each donation: he also gets a $10 gift card. It doesn’t take long and he is helping out so much by doing it. If both of us were to donate every other week, that is $520 a year in gift cards! That is Christmas and birthday gift money that can be put into our savings account and we are half way to our goal.
Find one thing to cut that will save you $10 a week: This seems simple enough, but if you are living lean already, it can be tough. We actually decided to cut meat out of our food budget one night a week (healthier and saves some cash).
Part-time work: This is a tough one too. Jobs are hard to come by nowadays. If you are limited in your time and dedication (it is hard to commit to a job when your kids ARE your job) it makes it even tougher. There are always people hiring though. Keep looking and find something that will work for your family.
These are just starter ideas. Get creative. There are many ways to grab up some extra cash and sock it away for a rainy day because more than likely at some point you will need it and will be glad you did.
Read part 1 of Angie’s Living on $30,000 Best Frugal Tips on Thriving and (not just surviving) on $30,000 a year!
Part 2 – Basic Home Budgeting
Part 4 – How to Not Spend Money
Part 6 – Money Management Skill
Part 7 – Why Couples Should Talk About Money?
I am a stay at home mom and happily married to my husband Tom. I have a five year old daughter and a two and a half year old son. I grew up in Orlando, but went to school in New York City and lived in Los Angeles before moving home to raise a family. I have worked in the film industry since the early nineties, and for over a decade with the Florida Film Festival. I also spent many years working in marketing with Glaceau and Honest Tea. But, I am happiest at home building my family.
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