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The world we live can be uncertain sometimes. No matter how meticulous you are with your finances, there is no way to anticipate some of the unexpected financial emergencies that can pop up. From unexpected home repairs to an illness in the family, everyone will run into a financial emergency occasionally.
To give you an example, I was in Montreal at a business conference when I had six missed calls in a row from my husband, who was at home with the children in Iowa. He woke up to several feet of water in our finished basement, where my home office and tens of thousands of dollars worth of things were stored. After cleaning up all of the water, we flooded another three times that month. Because we weren’t in a flood zone, we couldn’t get flood insurance even if we tried. This meant that the $30,000 in house damages alone weren’t covered, not to mention the tens of thousands of dollars in stuff.
Or, take the government shutdown as another example. How would your finances look if all of a sudden you didn’t get the next few paychecks you were expecting?
The truth is though, not everyone is properly prepared for such a major expense that can’t be delayed. If you don’t have an emergency fund ready to help you escape financial turmoil, there is no better time than now to create one.
There are many simple ways to build an emergency fund fast, you just must be dedicated and creative.
Here’s how to build an emergency fund
Set a Goal
When creating your emergency fund, you need to decide how much you want to have tucked away. The best way to determine how much you will require in your emergency fund, is to first calculate your monthly expenses. Consider the basics like food, rent, utilities and insurance and then add in other expenses such as loans, debt and your car payment. Doing this will give you a solid figure regarding how much you will require for a month of living if an emergency occurs. Set your emergency fund goal to save how much makes you comfortable.
Take some time to look around your home. Chances are you have several things that you don’t need or use anymore that can help you get some money. In fact, a garage sale can bring in a good chunk of money to put towards your emergency fund. Just remember, all the funds you bring in from items you sell needs to go directly into your emergency fund.
Cut Back on Daily Expenses
Skipping that daily latte and taking your own lunch to work rather than eating out can help you to save quite a bit of money rather fast. Take a good look at your spending and figure out where you can cut back, then rather than putting that money into other people’s pockets each day, place it directly in your emergency fund.
Start a Side Hustle
While working more may not seem all that exciting, taking on a side hustle can help you to start saving extremely fast. If you have time in your schedule to start working a part time job, even for a short period of time, it is a good idea to take the plunge. Just remember to put your full paycheck into your emergency fund account.
Looking for side hustle ideas? Check out 10 BRILLIANT WAYS TO MAKE MONEY ONLINE
There are several ways to build an emergency fund fast and it’s important that you start today. Set goals, sell things, cut back on expenses and take on a side hustle and in no time, you will find yourself prepared for anything that comes your way.