Emergencies happen when you least expect them. My husband sent me a short text a few years ago,
My stomach sank. He took the truck to our mechanic because a dashboard light came on. 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 an 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(affiliate link), 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 can be much 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. Now that we’ve paid off six figures of non-mortgage debt, we are working on saving 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 This will help to avoid any impulsive non-emergency spending. Remember this account is specifically for your emergency fund. It is NOT a spending account.
3 – Commit to funding the account.
You never know when you will need this money. The dashboard light came on suddenly in my husband’s truck 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!
25 Ways to Find Money for your Emergency Fund
To kick start your emergency fund savings, take the next 31 days and challenge yourself to find $1000. Make it a game and be creative when looking for money within your budget and finding new ways to earn extra money.
I offer a worksheet (pdf) to track your found money to email subscribers (along with other freebies). Subscribe to my emails HERE!
The following list of 25 ideas is broken into two larger categories: ways to reduce your spending and ways to earn extra money. Recently I tried something completely new to me and earned $1000 in less than 3 months by donating plasma–see the details in #14.
Cut your spending, BUT still live well:
No one wants to read, “cut your spending“, because what they hear is live like a miser. Instead, be creative with your current resources, so that you don’t feel the sacrifice. This first group of ideas is about cutting back–but still living well–AND putting that money not spent into your emergency savings.
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 throughout the month and see how much you can save. Ask yourself, “Is this a need or a want?” If it’s NOT a true need, ax it (for now) and trust me, YOU WILL SURVIVE!
2 – Reduce your grocery spending without sacrificing quality.
Do you know how much you spend on groceries each month? If you do not know the answer, then there is a good chance you have room to cut back. Groceries is the easiest budget category to overspend. It’s also very easy to reduce your grocery spending just by planning your meals. It sounds dreadful, but it is possible to reduce your grocery bill without making everyone in your family miserable.
Related Reading: How to Save Money on Groceries
3 – Reduce your monthly utility bills.
Are you paying too much for home/auto insurance, cable, internet, cell? 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, and maybe that will give you the inspiration to skip the AM drive-thru.
For ideas, read: 5 Make-Ahead Breakfast Ideas
5 – Brown bag your lunch.
There was a time (pre-pandemic) that I ate lunch out almost every day with friends. It was an escape from the office, but it was eating up my budget…see what I did there! An easy lunch idea in one word: leftovers! Put the money saved into your emergency fund.
6 – Eat dinner at home.
Dinner time can be stressful for everyone. Who wants to cook after a long day! We feel it at our house too and this is definitely an area I need to improve. As my kids have grown, I have expanded my work hours at our office and by the end of the week, I’m too cooked to cook, so take out it is!
However, there are ways to put a good meal on the table without relying on restaurants for saving your sanity. Challenge yourself to avoid take-out and put any extra money towards your emergency fund.
- Make meal planning a priority.
- 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. Cancel unused subscriptions
Make a list of ALL your recurring subscriptions, everything from Amazon to Fab Fit Fun to Netflix, and everything in between. Review your statements, because there might be subscriptions that you forgot about.
Add it up to get a total. Are you surprised by the amount? Now go through the list and really ask yourself if you use or need all of it.
We did this and realized that we have Netflix, Hulu, Amazon Prime Video, Disney +, and Sling TV—and my kids want HBO Max. We gave up cable many years ago, but realize now we simply traded one cable bill into TOO many subscriptions. This is an area that I also need to review.
8. Barter your gym membership!
Do you have a gym membership? If you’re not using it, cancel it today and redirect that monthly money into your emergency savings.
However, if you do use it, ask your gym if they swap volunteer hours for a free membership. Years ago, my husband received a free family membership by working at the front desk of the gym from 6 – 9 am two Saturdays a month. We were paying $67 a month for our membership prior to his barter and he loved working there, so it was a win-win.
9 – 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.
10 – 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 that I offer to email subscribers. Challenge yourself to give a thoughtful gift without spending a lot of money. There are many gift ideas that don’t cost a dime.
Related Reading: 30 FREE, but Thoughtful Gift Ideas and see how creative you can be.
11 – 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.
12 – 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+-year-old dryer stopped working. We found a YouTube 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 too, but if you’re trying to save money, try to paint your piggies yourself.
13 – 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 store credit for the current price if you don’t have a receipt, but that’s better than nothing. If you get cashback, put it in your emergency fund.
Bring in Extra Money:
14 – Donate Plasma
A friend posted on Facebook about how she was making extra money by donating plasma. I was intrigued and asked for more info and decided it was worth a try. I started donating plasma in January 2021 and earned over $1000 in the first 3 months of the year. It’s not for the faint of heart, but if you can tolerate blood and needles, then it might be an easy way for you to earn extra cash too.
Related Reading: My Honest Review: I donated plasma to earn money!
15 – Have a yard sale.
Yard sales take some work, but you can declutter your house and make some cash in the same weekend. I’ve been hosting yard sales for over 20 years and have made quite a bit of money in the process. Yard sales are great for smaller items, like clothing, household and lawn items, and kids/baby stuff.
Related Reading: 7 Tips for a Successful Yard Sale
16 – 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. Recently, my husband sold an unused armoire/bookshelf set for $300, a sectional for $400, a twin headboard and matching dresser for $150, and unused video games for about $80 by posting them on Facebook Marketplace.
17 – 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.
18 – Teach your skills.
If you play piano or are crafty, teach it. If are fluent in Spanish or were a math major in college, start tutoring. 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!
19 – 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!
20 – Earn Cash Back with Shopping Apps.
It is super easy to earn cashback on grocery products that you were going to buy anyway. Also, I don’t order anything online without first checking Rakuten to see if I can earn cashback on my purchase. They pay you quarterly and it’s like leaving money on the table if you’re not ordering through a cashback portal.
- Rakuten Review: How to Earn Cash Back on Online Purchases
- Ibotta Review: How I Earn Cash Back on Groceries
- Upromise Review: One Way we are Saving for College
21 – 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. It was a great way to clean out my jewelry box and make some extra bucks in the process.
Related Reading: Sell Your Gold Jewelry for Cash
21 – Mow lawns in the summer months, and shovel snow in the colder months.
The neighbor kids are doing quite well on my street. If you have a lawnmower and/or shovel and have some extra time on the weekends, offer your services to the neighbors.
22 – Offer house and/or pet sitting services.
During the 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 emergency fund.
23 – Flip your thrifty finds.
If you have an eye for antiques and unique collectibles, scour yard sales and thrift stores and flip your finds on websites like Craigslist and eBay.
24. Become an Instacart shopper.
One time as I was shopping in ALDI I ran into a friend who was shopping for someone else through Instacart. She loved that she could make extra money and fit it into her schedule. According to the website, Instacart is an app that connects you to customers who need groceries. You use the app to sign on, find orders, then shop and deliver those items to your customers. When you get paid, you can cash out instantly and you can earn even more with tips for great service.
Do some research on your own to see if this is the right fit for you. Also, look into food delivery services, such as GrubHub, Uber Eats, and Door Dash.
25 – 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.
But you know what sucks more? No cash to pay for them. Make it a priority to build your emergency fund. Make a game out of finding the extra money and get that savings account funded asap!
This is part two of a two-part series: Emergency Funds 101. Be sure to read part 1,
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