5 Ways to Find the Money to Start an Emergency Fund

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Save more, spend smarter, and make your money go further

An emergency fund is one of the most important aspects of a sound financial plan. Having an emergency fund is a great sign of financial health. If you’re currently sitting in a position where you don’t have an emergency fund, it’s definitely something that you want to start, even before you start investing in retirement or other areas. Here are 5 ways to find the money to start an emergency fund.

Include your whole household

The most important thing that you’ll want to do is to make sure to include and involve your whole household. The other people that live with you are an important part of the money that you spend, so it makes sense to include your spouse, partner, children, or anyone else that has an impact on how your money comes and goes. 

One way to make sure you’re all involved is to have a family meeting where you set a goal and make it a contest. Gamifying the idea of an emergency fund can be a good way to get everybody’s buy-in. You might consider getting a big jar in a visible place in your house. It can serve as a visible reminder of the goal that you’re all shooting for. As far as how much is enough, $1000 is a good starting amount, but depending on your situation, that may not be enough.

Start a budget

Starting a budget is one of the most important things towards getting an emergency fund started. It’s hard to know how much extra money you have if you’re not sure where your money is going. A budget can help ease financial stress and give you an indication of where you might be able to save some money. Remember that a budget is only a tool to help you avoid spending money on things that aren’t important to you so that you still have money available for the things that ARE important to you.

Look for things to sell

To help jumpstart your emergency fund, you can look for things around the house to sell. Having a garage sale or using an online app or marketplace to sell things isn’t a sustainable money solution for most people. But in many cases, you can find a few things around the house that you’re not using or no longer need. Tie this into the earlier suggestion to involve your whole family. Even kids can help contribute with toys, video games, or other items to sell. 

Another way to find some money to bolster your emergency fund is to look at which of your recurring expenses you can get rid of. Mint’s automatic subscription tracking feature can be a great way to make sure you understand what you are paying for each month. That way you can make sure it’s only the things that provide value.

Save any money that comes from windfalls

Another way to bolster your initial emergency fund is to plug in any money that comes from unexpected or rarely occurring windfalls. This is another strategy that doesn’t work great for regular monthly budgeting but is perfect for something like an emergency fund, which is more of a one-time expense. So if you are getting a tax refund, or a government stimulus check, or some other sort of one-time expense, consider putting a big chunk of it towards your emergency fund. 

Remember that an emergency fund should be money that is held separately from your regular accounts. You want it to be easy to access in case of an emergency, but not TOO easy. If you commingle your emergency fund money with the rest of your money, it becomes far too easy to just spend it. Then when that rainy day finally hits, you find yourself with nothing left in your emergency fund to help you pay for it.

Automate your savings

The final way to find the money to start an emergency fund is to pay yourself first. Going along with the idea of separating out your emergency fund into a separate account, you want to automate putting money into your emergency fund. If you get paid regularly via payroll, start by putting even $5 of your regular paycheck into your separate emergency fund account. As you get a pay raise, adjust your budget or find more ways to save, you can increase that amount. 

You’ll also want to regularly reevaluate your emergency fund strategy. An emergency fund is not just a “set it and forget it” thing. You need to regularly review it and determine if it’s still working right for you. Do you have it stored in the right accounts? Is the amount that you have in your emergency fund enough for most emergencies? These are some of the questions that you can ask yourself in your regular review. Once you’ve got your emergency fund in place, you can start deciding what comes next after your emergency fund is in place.

Hopefully, these tips have helped you figure out how to find the money to start your emergency fund and get your finances in tip-top financial shape.

Save more, spend smarter, and make your money go further

Dan Miller
Dan Miller

Written by Dan Miller

Dan Miller is a freelance writer and founder of PointsWithACrew.com, a site that helps families to travel for free / cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 kids. More from Dan Miller