Do you know how insignificant things become if you have $1,000, $2,000, or $5,000 sitting in the bank?
While the amount held in rainy day funds can vary widely between individuals, a common recommendation is $1000. That's enough to replace a broken dishwasher, pay for minor dental work or get your car checked out. It even might be enough for a month of rent or a few bills. But how do you get that first $1000?
Here are some ideas for quickly building up an emergency fund:
- Take on a side gig: If you don't have enough money to build an emergency fund, why not make more money? It doesn't have to be a permanent second job and it need not be glamorous or terribly exciting either. Some ideas include working a temporary or seasonal retail job, doing mystery shops, or picking up odd jobs such as babysitting or yard work. Just remember to put all that money into your emergency fund and not into your pocket!
- Use a windfall: Perhaps you expect to receive a tax return this year or an annual bonus from your workplace. This is a great opportunity to build your emergency fund. Using money from a windfall means you can instantly have money stashed away, with no extra effort or budgeting.
- Sell your stuff: Unless you've always been a minimalist, most people have stuff lying around the house that they rarely, if ever, use. Why not make a bit of money, clear out some clutter and beef up your emergency fund in one fell swoop? Take a look inside your garage and closets and try to identify items that could be sold on eBay, Craigslist or garage sales. Then, take that money and add it to your emergency fund.
- Budget for it: When all else fails, you can stash away a little bit of money every month into a savings account. Even $50 a month would get you $600 after one year. It'll take you longer and you'll probably hit some bumps along the way, but eventually, you'll have a healthy emergency fund saved up.