Emergencies happen when you least expect it. Just last week, my husband sent me a short text,
My stomach sank. He took the truck to our mechanic because a light came on on the dashboard. We were hoping for an easy (and inexpensive) fix, and we were certainly not expecting this news.
But the truth is, we have the money. Our emergency fund has saved us countless times and it will save us once again with the truck. And while I don’t like parting with our money, I am grateful that this repair won’t send us into financial distress.
How would you pay for an unexpected car repair? If you can’t answer with the word, CASH, then please, set yourself up for success and build your emergency fund.
Follow these three action steps and the list of ideas below to find the cash for your fund.
3 Action Steps to Set Up your Emergency Fund
1 – Determine how much you need.
Dave Ramsey suggests in his book, The Total Money Makeover, that you create a starter emergency fund of $1000. He then advises paying off your non-mortgage debt before fully funding an emergency fund with 3 – 6 months worth of expenses. Personally, I think a starter fund should be $2000-$3000. In our experience, life’s unexpected emergencies tend to be higher than $1000.
If you are self-employed, work for a company or in an industry that is unstable, or maybe you or someone in your family has medical issues, you might want to save 6-12 months of expenses. Being self-employed, we have a higher starter fund on hand and when we pay off our non-mortgage debt, we will save to at least 6 months expenses and maybe even more.
2 – Decide where to put the money.
Consider setting the money aside in a savings account that isn’t immediately accessible and doesn’t have an ATM attached to it, to avoid any impulsive non-emergency spending. Remember this account is specifically for your emergency fund. It is NOT a spending account.
We use an online account like, Capital One 360 (my referral link).
3 – Commit to funding the account.
You never know when you will need this money. The dashboard light came on in my husband’s truck suddenly and there was no prior warning. Become hyper-focused on funding this account. You will be so thankful later.
Now it’s time to FIND THE MONEY!
30 Ways to Find Money for your Emergency Fund
Look for money within your budget and find creative ways to earn extra money.
Stop Spending, BUT still live well:
1 – Declare a “Needs Only” month.
How much can you save just by cutting out non-essential spending? Take one month and declare it a Needs Only month. Challenge yourself to question your purchases and spending through out the month and see how much you can save. Ask yourself, “is this a need or a want?” Trust me, YOU WILL SURVIVE!
2 – Reduce your grocery spending without sacrificing quality.
Can you answer this question, how much do you spend on groceries each month? If you do not know the answer, then there is a good chance you are over spending. The easiest way to reduce your grocery spending is to plan your meals. Read 11 Simple Menu Planning Tips to learn how to reduce your grocery bill without making everyone in your family miserable.
3 – Reduce your monthly utility bills.
Are you paying too much for home/auto insurance, cable, internet? Collect your bills and start shopping around for new vendors. A great way to start is to ask your Facebook friends for recommendations and then start calling around based on what you find.
4 – Skip the AM drive thru and eat breakfast at home.
If you find yourself hitting the drive thru on your way to work, start making your breakfast and brewing your coffee at home. Add up how much you are spending in the morning and you’ll see how much you will save for your fund.
For ideas, read: 5 Make Ahead Breakfast Ideas
5 – Brown bag your lunch.
Not enough time in the morning to make breakfast AND pack a lunch, one word: leftovers! Put the money saved into your emergency fund.
6 – Eat dinner at home.
Dinner time is stressful. With work, school, and extra-curricular activities, we feel it at our house too. But when you’re trying to save money, cut out this costly expense. Here are a few ideas:
- Meal Plan. Meal Plan. Meal Plan.
- Try freezer cooking. This time-saving technique will save you money and your sanity. Here are my freezer cooking tips and recipes.
- Keep your pantry stocked with your go-to meals. When we’re crazy busy and the family is demanding that they be fed, I always have the ingredients for spaghetti on hand.
- And when dining out, at least follow these 15 Smart Tips to Save Money when Eating Out.
7 – Collect your change.
At the end of every day, empty the change from your wallet and pockets into a jar. Another idea would be to stop spending your $1 or $5 dollar bills and collect them. You’ll be surprised how much you accumulate and don’t forget to deposit the money in your emergency fund.
8 – Rethink your gift spending and create a budget for the year.
Plan your gift giving for the year using my FREE Gift Spending excel spreadsheet. Challenge yourself to give a thoughtful gift without spending a lot of money. There are many gift ideas that don’t cost a dime. Read 30 FREE, but Thoughtful Gift Ideas and see how creative you can be.
9 – Find free entertainment.
Yep, you don’t need to spend a dime to entertain your family. You just need some imagination and a nose for free family fun. Put the money in your emergency fund instead. Check my Frugal Family Activities list for ideas.
10 – Do It Yourself.
If you have a big financial goal, think about how much you pay someone to do something that you are capable of doing yourself. What luxury service can you give up…just until your emergency fund is full. Remember, these sacrifices aren’t forever.
- Are you paying someone to mow your lawn?
- Do you take your car to a car wash?
- Can you fix a repair yourself? Our 12+ dryer stopped working. We found a You Tube video that showed us specifically how to fix it. I paid $40 for a part, and didn’t have to call a repairman. Several years later, it’s still working fine.
- Pretty nails and toes? I love a pedicure, but if you’re trying to save money, paint your toes yourself.
11 – Return unused purchases.
Have you ever bought a pair of shoes that looked really cute in the store, but ended up sitting in your closet? Did you buy the materials to make that cute craft that you found on Pinterest but the bag is still sitting in your dining room…3 months later? Instead of letting stuff languish unused and eventually given away, return it!
I’m always amazed by the amount store tags I see on clothing and household item at thrift stores. Research the store’s return policy for unused purchases without a receipt if you don’t have it. You will likely have to accept a store credit for the current price if you don’t have a receipt, but that’s better than nothing. If you get cash back, put it in your emergency fund.
Bringing in Extra Money
12 – Sell your unused gold jewelry.
Many years ago, I gathered up all of my unused and broken 14k jewelry and sold it to a jeweler. You can read more about how I made $150 by selling my gold jewelry here.
13 – Have a yard sale.
Yard sales take some work, but you can declutter your house and make some cash in the same weekend. Here are my 7 Tips for a Successful Yard Sale.
14 – Sell the big stuff online.
If you have some bigger items, you will likely make more money selling them on Craigslist or your local Facebook sale page than at a yard sale. My husband had success selling unused video games for about $80 by posting about it on Facebook.
15 – Find a part-time job.
If you need to save a lot of money and you have pinched every last penny, then consider finding a part-time job in order to find the money for your emergency fund. Consider what your hobbies and interests are and look for work in those fields. For example, if you love crafts, see if Michael’s is hiring, or if you love to garden, see if your favorite local nursery is hiring. If you need to work a second job, it might as well be interesting to you.
16 – Teach your skills.
If you play piano or are crafty, teach it. If are fluent in Spanish or were a math major in college, tutor. My husband has an extensive background in aquatics and offers private swim coaching and lessons on weekends. What is your skill set? Teach it! And put the money in your emergency fund.
17 – Sell Your Skills.
I have a friend who sells cookies and candy during the Christmas and Easter holidays. Another friend sells her homemade artisan bread and another friend sells hand sewn dolls at craft fairs. What is your craft? Sell it! And put the money towards your emergency fund.
18 – Use Cash Back Grocery apps.
I earn about $20 every 2-3 months with my favorite grocery phone apps. It is super easy to earn cash back on grocery products that you were going to by anyway. Read: Earn Cash Back on these 4 Simple Grocery Apps and put the extra cash towards your emergency fund.
19 – Shop thrifty for you clothing needs.
I truly am not opposed to shopping at retail stores, but I regularly find what I need for myself and my daughters at thrift stores and spend a fraction of the price. I am very picky about what I buy second hand, and I still find brand new or hardly worn clothing. And now you can thrift shop from the comforts of your own home with online thrift stores like thredUP. Not sure if online consignment shopping is right for you, use my referral link for a store credit for first time thredUP shoppers to try it out.
20 – Mow lawns in the summer months, shovel snow in the colder months.
The neighbor kids are doing quite well on my street. If you have a lawn mower and/or shovel and some extra time on the weekends, offer your services to the neighbors.
21 – Offer house and/or pet sitting services.
During vacation season, offer to water plants, pick up mail, open and close the blinds, take care of pets, for a fee…of course. Put the money in your fund.
22 – Flip your thrifty finds.
If you have an eye for antiques and unique collectibles, consider flipping your finds on websites like Craigslist and eBay.
23 – Become a Mystery Shopper.
I have never personally done this, but Tai & Talaat from His and Her Money made $400 in two months from mystery shopping. They share their experience in this video.
24 – Become a book flipper.
There are online sites that will buy books. This idea intrigues me, because we have a basement full of books and I regularly see new releases at thrift stores and yard sales. I found this post very helpful.
25 – Start a blog.
Blogging is not a get rich quick scheme. It takes an incredible amount of work to make an income. If you’re creative, enjoy writing, social media, and are passionate about a particular subject, consider starting a blog. A great place to start is by reading Ruth Soukup’s book, How To Blog For Profit: Without Selling Your Soul.
Emergencies suck! But you know what sucks more, when you don’t have the cash to pay for it. Be prepared. Make it a priority to build your emergency fund.
You will not be sorry.
This is part two of a two part series: Emergency Funds 101. Be sure to read part 1,
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