It's important to have an emergency fund, but it's hard to save when money is tight. Here's how to create an emergency fund on a shoestring budget.
Having savings for emergencies is extremely important for anyone. However, creating an emergency fund can present a challenge when you are on a tight budget. The problem is, having an emergency fund is even more important if you are on a tight budget because something seemingly ‘small’ to some can create serious financial insecurity. An emergency fund is for things like short-term job loss, car repairs, and other expenses that come up unexpectedly. Start building your savings with these tips on how to create an emergency fund on a shoestring budget.
How to Create an Emergency Fund on a Shoestring Budget
Save all change – Not many people pay with cash anymore and in my opinion, this can lead to a lot of overspending. This is because we aren’t physically seeing the money leave our hands. It’s easier to think it as out of sight, out of mind when it’s just numbers in an account. Instead, pay in cash whenever you can and save all coins you get in change. It may not seem like much, but you can save up a couple hundred dollars this way in a relatively short period of time. Additionally, you may consider saving all $1 bills or $5 bills you get in change. These small amounts of money saved don't feel like a big chunk.
Let others know about your goal to create an emergency fund – This tactic isn’t so others will give you money, but rather so they can understand when you aren’t available for going to dinners out or a coffee trip. Letting others know about your goal can also help hold you accountable because it makes you consider your purchases more.
Do some part-time freelance work – If you have anything you can do freelance, try doing it as a part-time job on the side with any extra time you have. If you don’t have a freelance skill, maybe consider doing like kids used to do and walk dogs, babysit or mow lawns for some extra cash. If it’s around the holidays, consider a part-time holiday/seasonal job.
Consider selling things you don’t need – Almost all of us have more clothes, toys, and junk than we need and you can almost bet someone out there would gladly buy it from us. Consider doing a declutter and selling anything you can for cash to add to or start your fund.
Use apps to create the funds – There are many apps out there that pay you to use them or at least give you a good rebate you can turn into cold hard cash. Consider using Ibotta and using your rebates to build your savings. There are also survey apps that pay you small amounts such as iPoll or Swagbucks.