9 Tips for Starting an Emergency Fund Today

In life, nothing is guaranteed. That’s especially true of our finances. Our jobs aren’t a sure bet. And major, unexpected expenses can arise at any time — especially when the nation is in the middle of a coronavirus pandemic or at the start of a recession.

That means a healthy emergency fund is a must. Following are a few creative ways to build an emergency fund on a shoestring budget.

Once you’ve kick-started yours, check out “The 3 Best Places to Keep Your Emergency Fund.”

1. Set a goal

Setting clear and realistic goals is the first step to achieving great things. Use your total monthly net take-home pay to create a reasonable savings goal. Visualize reaching your goal and track progress along the way.

Start slow, stay steady and watch your stash of cash grow bit by bit. Avoid the temptation to dip into the fund for any reason except legitimate emergencies. You’ll be surprised how having this little self-made insurance policy gives you extra peace of mind.

2. Put the word out

Let friends and family know that you’re working toward a financial goal. This helps develop a community of support.

There is no need to divulge your deepest financial secrets — just communicate that you hope to save by skipping a few lunches out or brewing your own morning coffee.

Success is contagious, so don’t be afraid to share how well things are going. You might inspire others.

3. Spare some change

Although it may sound like a painfully slow and quaint strategy, our parents and grandparents knew the power of saving a dime at a time. Start a new habit of paying for everyday purchases exclusively with cash, pocketing the change.

Funnel all that spare change into a jar, and let your savings grow the old-fashioned way.

4. Start a part-time gig

If you have skills that can be marketed in a freelance capacity, consider launching a part-time business to partially fund your emergency account. Or perhaps an evening or weekend job can give you a quick leg up on savings.

Don’t lose sight of the goal: Pocket what you make, and keep your lifestyle low-key.

5. Sell the excess

Take a moment to look around: Are you sitting in a home or office filled with excess stuff?

Stick mental price tags on all those old clothes, unused electronics, dusty video games and idle bicycles. Sell them on eBay, post on Craigslist, host a yard sale or work with a local consignment shop to turn clutter into cash. Devote your windfall to your emergency fund.

For more tips, check out “Don’t Toss These 7 Household Items — Sell Them.”

6. Rethink your 401(k)

Temporarily reduce your 401(k) contributions to the lowest amount that will still allow you to take advantage of company matching funds. Direct the extra cash to your emergency fund.

7. Save the raise

If you’re lucky enough to receive a cost-of-living pay increase or a one-time bonus for a job well-done, consider adding the extra cash to your emergency fund.

8. Fund with your refund

Those yearly tax refunds feel great, but having too much withheld from your paycheck means you’re providing the government with an interest-free loan throughout the year.

This isn’t the best financial strategy. But if you’re committed to it, at least make sure to make the most of your tax refund. Instead of planning a weekend shopping spree, put the money to work by socking it away in an interest-bearing account for emergency use. To find a great account, stop by our Solutions Center and search for the best rates banks are offering.

9. Double-time that overtime

If your job has opportunities for overtime, use them strategically to build your emergency fund. Keep track of your overtime hours and transfer that amount into a savings or money market account each pay period. When you hit your goal, phase out the overtime, or set your sights on the next financial target.

Building an emergency fund from scratch takes perseverance and discipline. But it doesn’t have to be drudgery. As with any focused project, you’ll be surprised how energizing small successes can be.

Before you know it, you’ll have an emergency fund that will help you sleep at night. Who can put a price on that?

Do you have more tips for building an emergency fund? Share them by commenting below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
8 Secrets of an Expert Thrift Store Shopper
8 Secrets of an Expert Thrift Store Shopper

Here’s how a veteran thrift shopper scores the best deals — and turns a profit from them.

7 Ways Anyone Can Cut Their Health Care Costs
7 Ways Anyone Can Cut Their Health Care Costs

Here’s how to lower your medical expenses without skimping on care.

Can My Wife Use My Social Security Benefits While Letting Hers Grow?
Can My Wife Use My Social Security Benefits While Letting Hers Grow?

Your self-discipline in not uttering three little words helps determine whether you can use a key claiming strategy.

How to Prepare Your Finances for Retirement in 7 Steps
How to Prepare Your Finances for Retirement in 7 Steps

Here is how to get your finances in shape for your golden years, one step at a time.

9 Things You Should Never Pay For With a Debit Card
9 Things You Should Never Pay For With a Debit Card

Use your debit card for one of these expenses, and you could risk your bank account balance, your credit score or even identity fraud.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

17 Surprising Things You Can Sell for Extra Money
17 Surprising Things You Can Sell for Extra Money

You probably don’t realize these items are worth decent cash.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

8 Federal Income Tax Breaks for Homeowners
8 Federal Income Tax Breaks for Homeowners

Some of these deductions and credits are available to a wide swath of homeowners.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

10 Types of Retirement Income That Are Not Taxable
10 Types of Retirement Income That Are Not Taxable

There are lots of things Uncle Sam can’t touch — so long as you play by the rules.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

These 5 States Are the Most Expensive Places to Retire
These 5 States Are the Most Expensive Places to Retire

If you expect to have modest retirement income, you may want to avoid spending your golden years here.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.