You might be feeling overwhelmed with everything going on. That is okay. Take comfort in knowing that it is never too late to start saving for an emergency. Follow these simple steps to learn how to best save for an emergency fund and get started on building yours today.
Step 1: Take Stock Of What You Have
Honestly. How much money do you have in your accounts right now? Take a look at all your banking accounts. Take a look around your house (search under the mattress and in the couch if you have to).
True story, I once found $30 in an old birthday card I had in the back of my closet.
Add up all the available cash you have on hand. This is important to know at all times, but especially in cases like this.
Next Step – How Much available credit do you have?
Now is not the time to start applying for new credit and I would not advise people to go opening 2-3 cards out of panic. Instead, see how much available credit you may already have on your credit cards or via a HELOC option.
These funds will serve as a back up to any cash you do have.
If times are truly dire, note that you may have to use this money. No, it is not ideal to rack up credit card debt. However, it is even less idea to default on a loan or not be able to pay for necessities like groceries.
Once you have this number figured out, get started with Step 2.
Step 2: Find Out If Your Hours Might Be Affected
It’s hard to save money for an emergency fund when you are not sure what might happen with your income.
At times like this your employer owes you one thing: HONESTY.
Will company operating hours be cut? Can you expect a decrease in your income? Ask your boss what the plan is for handling the current situation at hand. If you know what to expect, this can also help you better plan out your finances.
Budgeting Tips/Money Management Hacks:
Step 3: Map Out Your PB&J Budget
Consider this the absolute minimum amount of money you need to survive. This does not include Netflix and it sure as heck does not include Amazon Prime.
This is the money needed to pay your rent, give you food and keep utilities on. Figure out this number and start planning to fill any gaps. There are still plenty of options to start a side hustle or even do temporary work with reputable companies.
Those who need help making a budget can follow our step by step budget guide. We show you the 4 simple steps to making an awesome budget. There you can also download our FREE budget worksheet to help you get started.
Step 4: Start Saving ANY Amount
I would love to have $15,000 in the bank by tomorrow. However, we all have to start somewhere. If you are still employed and can cut back in areas of your life, now is the time to do so.
This can mean stopping subscriptions or putting them on pause. It might also mean calling you various providers and seeing what relief programs they have.
The fastest way to start to save for an emergency is by cutting back. The optimal way is to increase your income. If you can do both at the same time, even better.
Whatever amount you can put away $200, $50 even $5 will help. Truly! The money that you put away snowballs over time. Before you know it, you will have a good chunk of money stored away.
The secret is to be consistent when you start to save for your emergency fund.
Additional Steps TO Take Right Now
- Seek out additional resources: Your local food bank or church, govt assistance, local church or local school.
- Ask for help: Your job may have an employee assistance program. Many lenders are aware of the situation at hand. You might even be able to get your credit card interest rate lower or payment suspended. The squeaky wheel gets the grease, so use this time to speak up. You might qualify for something which can be beneficial towards improving your financial picture.
Please note, this article is directed towards individuals who are still employed. If you have recently lost your job, please visit this helpful resource to learn about how to apply for unemployment benefits.
We’ve also created a useful resource for those looking for a remote job. In it we list helpful strategies on finding real work from home opportunities and tips on preparing for your interview.
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