If you want to build an emergency fund fast you will likely need to make some sacrifices and plan. With the right goals in mind, you can save money quickly, and be prepared to weather any storm. You don’t need to be a genius to save your money wisely. Just follow these steps and you’ll be well on your way to building an emergency fund.
- Start with a clear goal
- Use a Budget App to Track expenses
- Cut Subscriptions Services
- Set up automatic payments
- Sell a used item on eBay
- Do some work on the side
- Make a radical change
Start with a clear goal
To be successful in most things in life, you need to have clear definable goals. A simple plan is even more critical when trying to build an emergency fund fast. But what’s the right emergency fund goal for you?
Well, it depends. Generally, most experts will tell you to save somewhere between three to six months’ worth. However, if you’re trying to pay off debt, this may not be ideal. Dave Ramsey recommends saving up $1,000 first when starting your emergency fund. A $1000 goal allows you a cushion, just in case something goes wrong while you’re paying off debt.
When you have paid off some of your debt and want to move forward, calculate how much savings you would need to cover all of your expenses for six months. Then start saving a portion of that significant number every month.
Use a budget app to track expenses
Budgeting apps like Mint and Wally help you track expenses and where you can cut costs. They will also notify you when you are about to go over budget. Mint will also make recommendations on where you can save.
Budgeting apps make you take a proactive role in your finances. You can also set up savings goals for things like an emergency fund, plan for retirement, school funding, vacation savings, and other expenses.
They also help do away with some budgeting myths and simplify the process of budgeting; if you want an app to pinpoint precisely where you can save money, download one of those mentioned above.
Cut subscriptions services
Subscription services have been growing in popularity over the years. Online entertainment is taking advantage of cord-cutters and those looking to save money. Except, as time has gone on, more and more subscription services have popped up.
These services combined can take a large chunk of money away from anyone. Cut your spending on entertainment and any unnecessary items. Cutting subscriptions will put more change in your pocket quickly so you can build an emergency fund fast.
Always be searching for ways to stop spending money and reduce the cost of your living expenses. You can build an emergency fund much faster with an extra $100 dollars each month.
Set up automatic payments
Having automatic payments with your bank account makes saving easy, painless, and less time-consuming, putting money out of sight, out of mind, and out of your hands to spend. Consider setting up large automatic payments to your savings account.
However, don’t just use your local bank savings account. Use a high yield savings account which will give you some return on the money you put in. Your money will grow faster and help you build up an emergency fund quickly.
Sell a used item on eBay
eBay is an excellent tool for selling any used item in your household. You can even put the cost of shipping on the buyer. Selling multiple things at once and putting that cash away will make the savings process much more comfortable.
You can set up an account in a couple of minutes and start selling those unwanted books, toys, or other items in your house. Consider using Facebook Marketplace as well. You can sell to buyers in your area so that you never have to leave your home.
Do some work on the side
Doing work for a friend or family relative can help boost your savings account fast. Do the odd job here and there to build your emergency fund quickly. You don’t have to be an expert at mowing lawns to make money. People are more than willing to pay $40 a week to have their lawn mowed.
There is also the possibility of working a part-time job. While this can be time-consuming and draining, it can significantly impact your emergency fund saving goals.
Make a radical change
If you want to save an emergency fund as fast as possible, you may need to make some radical changes. You can remove all unnecessary expenses except food and shelter. You can take public transportation or sell your car and buy a used one.
Some people have had luck doing house hacking, turning their home into a rental property and renting rooms to tenants to live rent-free! You’ll need to be creative with your thinking, but you can build your emergency fund fast, making some radical changes.
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