So you've heard it time and time again that you have to save at least 3 to 6 months of expenses for an emergency and it's now been a few years and you still don't have it. What gives?
Well it's much easier said then done, especially when you are already on a tight budget. But the feeling of not having an emergency fund should really bother you. More than half the U.S. population is only two missed paychecks away from a total financial crisis.
Few things help you relax as much as having a big pile of cash in your emergency fund. You breathe a little easier and have peace of mind. Here are 4 quick ways to help you build your emergency fund when you are already on a tight budget.
1. Sell something
You probably saw this coming. If you take a couple of hours to look around the house, you’ll be amazed at how many items (old kids’ toys, exercise equipment, dusty power tools, etc.) you could convert to cash. That’s much better than offering to pay your mechanic for a new alternator with an old treadmill that hasn’t run since Carl Lewis did. And with today's technology, you have no excuse. I challenge you take 15 minutes everyday this week to sell and post it on either Craigslist, OfferUp, or Ebay. Use every dollar from the sale and stick it in an account that is not linked to your checking account and let that money grow. You will absolutely amazed at how quickly this can grow after doing this everyday for a few months.
2. Find one-time income opportunities
There are lots of chances to do some quick work and earn bucks inside and outside your home. You can answer online surveys, care for pets while their owners are on vacation, participate in focus groups, babysit, put together a car wash, the list goes on and on. You restock your emergency fund, and soft-drink companies learn which color they should use for their new labels. Win win!
3. Get a temporary second job
None of us likes the thought of pulling extra hours when we’re already tired, much less being away from our families for that much longer. But remember, this is temporary. It will not be forever. Even four weeks of an extra job can make a huge difference when an emergency comes knocking on your door. At that point, you’ll be relieved that you worked extra, rather than being relieved you didn’t.
4. Make cuts in your budget
Look at your budget and do a bunch of little cuts that you won’t notice individually but add up significantly. Turn the thermostat down a degree or two, clip some coupons, and cancel unnecessary services or memberships. The results could raise some eyebrows. I highly recommend using the EveryDollar app for budgeting. It's simple to use and you will be surprised at how much extra money you have at the end of every month. Use every penny towards your emergency fund.
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