If you suddenly had to pay for a $500 car repair or an unexpected medical bill would you have enough money in your bank account to cover it? Or would you be forced to put it on a high-interest credit card? A recent study by the federal reserve found that 40% of people don’t have enough money in their emergency fund to cover an unexpected expense of $400 or more. Another recent survey found that 60% of people would be unable to cover an expense of $1,000 or more.
In both of those instances, the majority of people who didn’t have enough money in savings would use credit cards to cover the expense. The take away from all of this? The majorities of Americans are just one emergency expense away from a potential financial disaster.
The best way to protect your family’s finances and avoid going into debt is to maintain an emergency fund of at least $1,000. Eventually, that emergency fund should be enough to cover 3-6 months of living expenses. Having a minimum of $1000 in savings will not only help you when unexpected expenses hit, but it will also go a long way in providing you peace of mind.
If you don’t currently have $1000 in your emergency fund then this needs to be your very top financial priority. With a little planning and work, you can build your emergency fund in less than three months. So what are some ways you can find the extra money? These # ways are realistic ideas to help you build your savings account and your peace of mind.
How to quickly ( and realistically ) build a $1,000 emergency fund
1. Budget
If you don’t already have a budget then sit down with your spouse and review all your bills and your spending for the past few months. Determine your fix expenses such as rent/mortgage, utilities, food, gas, and other bills. Then review your discretionary spending to help you get a good idea of where and how your family is spending money.
Once you have all that information come up with areas where you can cut out or reduce your spending. You’ll be surprised how much money you can save by reviewing your budget and stoping any financial leeks.
If you already have a budget its a good idea to sit down and review it to make sure you’ve been sticking to it and look for any additional ways to save money.
2. Call and lower your monthly bills
After you create your budget the next thing you need to do is call anyone you’re paying money to monthly and try and get a lower payment.
- Call your cable provider and see if you can get a better monthly rate or cancel altogether
- Shop around for lower car insurance and homeowners insurance rates
- Check your monthly cell phone plan, can you drop your plan to one that costs less or could you switch to a different provider that will charge you less monthly?
- Also, check your cell phone bill to make sure that you aren’t be charged for things without your knowledge or that you aren’t being overcharged
- Cancel subscription services or boxes you absolutely do not need
It’s good to get into the habit of reviewing all of these expenses at least every 6 months to make sure you’re getting the best deal and not paying for things you no longer need.
3. Stop eating out
When I think of eating out my mind generally pictures going out for dinner, but eating out includes buying coffee, swinging by a fast-food restaurant, or getting a burrito at chipotle because you forgot to pack a lunch for work. Although those cost less than eating out for dinner they still can add up quickly.
You have food at home, and until you build up your emergency fund you shouldn’t be eating or drinking anything that you didn’t make yourself.
4. Sell stuff you don’t use or need
Another great way to bring in some extra cash to help fund your emergency account is by selling stuff from around your house that you no longer use or need. I’ll be honest with you, I use to have a big hang-up about selling my stuff online. The idea of craigslist creeped me out and I never thought the money I would get was worth the hassle. But now that Facebook has a marketplace it’s so easy to list things for sale and it doesn’t creep me out as craigslist did. (sorry if you’re a huge craigslist fan, I just have to be honest)
Not only can you make some extra money by selling your old stuff but its also a great excuse to declutter your house! Go room by room and really take the time to evaluate everything. If it doesn’t fit, you don’t use it, or you don’t need it to sell it!
There’s also a HUGE market for baby stuff on Facebook marketplace so if you’re holding on to things you no longer use sell them. Since we don’t plan on having any more kids I sold everything as soon as my youngest son grew out of it and things were almost always sold within a few hours of listing it.
Even if you’re not listing your items for very much just remember that things can add up quickly. If you’re only selling items for around $10, sell 10 items at $10 and you’ve made $100! I’ve made well over $1,000 selling things we no longer use and a lot of that was from small items that added up.
5. Slash your grocery spending
When you did you’re budget you probably found that you spend a lot of money on food every month. Until you reach your goal of getting $1,000 in your emergency savings slash your grocery budget as much as you possibly can. Some easy ways to do this are;
- Set a budget and stick to it
- Meal Plan and write a grocery list based on that plan
- “Shop” your pantry before you go to the grocery store so you’re only buying what you absolutely need.
- Do a pantry challenge and only make meals from what you already have in your pantry for a week or two.
- Cut out all sodas, juices, and alcohol
- Don’t buy premade meals, or processed frozen food
Another thing you should do it take some time to clean our your pantry. Toss old/expired food and donate anything your family isn’t going to eat. Clearing out your pantry allows you to see exactly what food you have, which will help when you meal plan and come up with your grocery list.
6. Do a 30 day no spending challenge
Kick your savings into high gear by doing a 30 day no spending challenge. Committing to spending only on the absolute necessities for 30 days will not only help you save money but it will help you and your spouse reset your financial mindset and get on the same page.
Want to know more about what exactly a no spending challenge is and how to do one? Check out Everything You Need To Know About Doing A No Spending Challenge – With free printable planning worksheet.
7. Find a side hustle
Another great way to bring in extra money to fund your emergency fund is through a side hustle. A side hustle is simply a small job that helps to bring in extra money on the side. As a mom, you probably don’t have a ton of time or energy to devote to a side hustle, but luckily there are a few easy things you can do to bring in some extra money;
- Offer babysitting services to families in the neighborhood or at your church
- “flip” furniture by finding old inexpensive (or free) furniture pieces and refinishing them
- Get crafty and sell items you’ve made by hand
- Do you have a college degree? Then VIP Kid will pay you to teach English to children in China (via the internet). I have friends who make anywhere from $500-$1,500 a month doing this!
Having an emergency fund of at least $1,000 is really vital to your family’s financial security and your peace of mind. It may take some hard work and sacrifice for a short period of time. But it will be well worth it be on the path to financial security!
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- How Doing a 30 Day No Spending Challenge Helped Get Our Finances Back On Track – And the important lessons it taught me
- 8 Tips and Tricks to Help You Clean When You Just Don’t Have The Motivation
- Do You Dream of Quitting Work to Become A Stay At Home Mom? You’ll need to do these 6 things first!
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