Besides having a spending plan and saving for retirement, one of the major tenets of financial wellness is to have a healthy emergency fund. But the reality is that when you’re juggling multiple financial priorities—or simply have a rough time covering your bills each month—building the recommended three to six months for the unexpected is super challenging.
I remember when I was making $30,000 at my first full-time job. While that doesn’t seem like terrible pay, living in Los Angeles can be pricey. With rent on my tiny studio apartment in West L.A. devouring about a third of it, I worked super hard to save for an emergency fund. I managed to save $5,000 in my first year, along with getting SCUBA certified and going on a few fun trips. And along the way, I found a few ways to jump-start my emergency fund.
Here are a handful of easy things you can do to kickstart your e-fund:
Look in your closet, garage, attic, and anything else you haven’t touched for a year or more, suggests Ben Watson, a financial coach and owner of Fiscal Fluency. Then put it up for sale on an online marketplace such as Letgo, eBay, Decluttr, or OfferUp.
“The simple act of getting rid of clutter or unnecessary items is elating as is the receipt of cash from doing things you love,” says Watson. “Use this hit of dopamine to motivate yourself to set a target amount and keep fighting until you reach it.”
Sock away “extra cash”
Your tax refund, returned purchases, a work bonus, a small raise, someone paying you back, or a cash gift for your birthday or Christmas. Take that “extra” cash and put it right in your emergency fund, suggests Amy Schultz, a financial coach and CEO of Financial and Female.
“This is effective because you’ve already spent that money and did just fine without it,” says Schultz. “So putting it in the emergency fund is easier to accept than watching money come directly out of your checking account. It’s all about mindset.”
Use cash and save your change
Yes, using cash helps you spend less. “Using cash is effective because it forces you to only spend what you have and, by saving your change, it shows how even the smallest amounts can add up over time,” explains Dr. Ann James, founder of Financial Freedom Battle Buddies.
More on saving your change: To this day I save my spare change in my doggy piggy bank. I then use that money for Amazon purchases, gift cards to restaurants to dine with friends, or gift cards to use for Christmas presents.
Go on a no-spending challenge
I’ve done a handful of these and not only does it help me save, but it has also helps me break bad spending habits. If you’re going to do a spending freeze, you’re certainly allowed to stock up on groceries and fill up your tank of gas ahead of time. I’ve found that it’s far easier to commit to a no-spending challenge during the week, when you’re mired in a routine and aren’t likely to be lured by social events.
I’m a huge fan of putting things on auto-pilot. Even when I wasn’t making much money, I commited to save $50 of each paycheck. And after six months’ time, I had $650 socked away. After a year, I had $1,300.
To date, setting and forgetting is my favorite way to save. I auto-save as much as I can. Because it’s money I didn’t even know I had, it’s a pleasant surprise when I check my savings, and find an extra few hundred bucks—or more—socked away.
If you already have a day job, working after hours is probably the least exciting thing. But it’s a great way to kick-start your emergency savings. During the first year I was out on my own, I cat-sat, and test proctored at a local university. While I only netted $1,000 in side hustle money that first year, it really helped me bulk up my emergency savings.
If you’re side hustling just for the money, easy and fun is a great M.O. “Look at your hobbies and see if there is a way to earn some money off of it,” says Watson. “Like dancing? Offer dance lessons. Enjoy dogs? Offer pet sitting.”
If you’re doing it to drum up experience to possibly parlay into a full-time business, then figure out what you want to ultimately do, what your current skill set is, then bridge the gap. For instance, I wanted to earn more money with my editorial skills. So I started off proofreading, copyediting, and eventually landed a few writing gigs. I not only earned additional dough, but gained some valuable professional skills.
Remember: no matter what your financial situation, you can certainly get your emergency fund started. There’s no waiting for that perfect scenario. Taking action today is the best way to build your savings.