Have you been wanting to build an emergency fund, but you don’t know where to start?
One of the most important first steps to financial freedom is getting some money saved up. Eventually you want to have money saved up for different things like a new car, vacations, planned medical expenses, etc. But the first thing you want to save up for is emergencies.
A lot of people recommend $1,000 to start with in your emergency fund. I think it’s a great first goal to shoot for because it doesn’t have to take very long to save up, and $1,000 can usually cover an insurance deductible or a minor vehicle repair. If $1,000 sounds way too low to you, then decide on a number that would make you feel safe.
I’m going to use $1,000 as a beginner emergency fund goal in this post, but you can replace that with whatever number suits you and your life better.
What I want to do is show you some real examples of how you can quickly save up $1,000. Even if you already have an emergency fund established, you can still use these principles to save up more money, pay off debt, or build up your vacation or new car fund.
1.) Consult Your Budget
Your budget is always going to be the first place you start when it comes to managing your money. If you’ve never made a budget before, I’ve got some posts to get you started:
So first things first–create a budget if you don’t already have one. This will give you a good idea of how much extra money you have to work with each month.
If you already have your budget set, great. I want you to examine each and every category and find where the “extra” money is hiding. You can do this a few ways:
- Take $10-$20 from each variable budget category (things like groceries, gas, entertainment, clothing, etc.)
- Eliminate one category completely, until you hit your savings goal. This would obviously be a category like date night, dining out, etc.
You may be surprised how much extra money you can find by going back over your budget again a few times.
Total Savings: $100-$300
2.) Go Around Your House and Create a “Selling List”
When is the last time you took an inventory of all your “stuff”?
If it’s been a while since you took a close look at your belongings, you might be surprised at how many things have piled up around you.
I’m not saying that having a lot of belongings is bad, and I’m not trying to say you need to get rid of all your belongings and become a minimalist.
But if you’ve ever gone through your home and de-cluttered, you know just how freeing it can feel. Getting rid of the clutter takes a load off your shoulders you didn’t even realize was there.
- Related Post: 5 Big Ways Minimalism Can Save You Money
What I want you to do is go through your house and start taking note of things you may be able to sell fairly easily. You might be surprised at how much you can find. Here’s a few ideas to get you started:
- Electronics – cell phones, TVs, your DVD collection
- Small appliances – stand mixer, espresso machine, toaster oven
- Clothing – name-brand clothes, purses, jewelry, perfume
Take some time and go through every room in your house and really examine each item. Ask yourself, “Can I live without this?” If the answer is yes, list it for sale.
Total Savings: $200-$500
3.) Save Without Sacrifice
This is where creativity kicks in. Start swapping out cheaper alternatives to things you use and love. A few ideas that may apply to you:
- Get your books from the library instead of a bookstore.
- Buy store-brand for most of your groceries and household products.
- Change up your entertainment routine–go to the movies on half-price days instead of Friday nights, play board games with friends, etc.
- Cook fast and easy meals at home instead of going out to eat all the time.
What are some things you can substitute cheaper alternatives for? Give yourself a good 10-15 minutes to brainstorm. Make it a challenge to see how many ideas you can come up with. Get your spouse and kids on board to see what they can think of too.
Total Savings: $100-$200
If you are able to hustle hard and use all three methods above, you could save $1,000 in just one month! Even if it takes you a few months, by examining your budget, selling things you don’t need anymore, and finding creative ways to save without sacrifice, you can build up your emergency fund in no time at all!
Have you built an emergency fund? How long did it take you to save up $1,000? Let us know down in the comments!