Secrets to Saving for an Emergency Fund

Secrets to Saving for an emergency fund now!
Secrets to Saving for an emergency fund now!

(Updated March 2021)

What is an Emergency Fund?

An emergency fund is a fund you set up to cover surprises that pop up, you weren’t expecting to pay. It happens to all of us at some point and having an emergency fund will give you security and less stress. You can take comfort in knowing you are covered when you end up in a surprise situation. If you do not have an emergency fund, it is best to learn how to save for an emergency fund quickly. You can start a mini-emergency fund for now of $1000 and build it up more when you are able.

Do You Need an Emergency Fund?

In short, yes, you need an emergency fund to cover different financial situations that come up unexpectedly.

Imagine you wake up, get ready for work, and start to walk out the door.  Suddenly you step into a puddle on the carpet. The next step is an even bigger puddle! Why is the carpet drenched? After searching more, you realize your water heater has flooded! This happened to us! Yes, our carpet was ruined and we needed a new water heater.

Or your son fell off the monkey bars at school, landed wrong, and ended up in a cast. Your insurance doesn’t cover the entire bill and you are left paying around $300. This also happened to us. An unexpected medical bill or two can leave you reaching for your plastic card.

Both of these situations happened to me and my family. These were times when we needed a large amount of money to fix the situation at hand. Fortunately, we had an emergency fund saved to ease the burden of these surprise bills. Whether it be your water heater, new roof, health emergency, car accident or any other situation with a surprise bill, there are times in life when you need extra money above your regular budget.

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Why You Should Start Saving for an Emergency Fund:

According to Forbes, over half of Americans are living paycheck to paycheck and have less than $1000 in a savings or checking account. Living paycheck to paycheck leaves no cushion to help ease the burden of car repairs or dental bills. The only option when a surprise bill pops up is to pull out the plastic dungeon of debt. Using credit cards increases your chances of always owing money and prevents financial freedom.

56.3% of people do not have the minimum recommended $1000 in an emergency fund. (Source Forbes) When life’s little mishaps happen, many are left unprepared and dig themselves further into the debt train. This is a train you want to exit, my friends.

Car repairs, house repairs, doctor’s bills…This is where the emergency fund kicks in. Having an emergency fund will ease the burden of these bills and keep you from accumulating debt.

Nonetheless, saving money is difficult. Hence, I recommend starting with a mini emergency fund of around $500-1000 to help cover unexpected bills. Then later, after paying off debt, add 3-6 months of your living expenses.

Reasons to Save for an Emergency Fund

  • Job Loss – What if you lose your job? Will you have enough money to get by? Money expert Suzie Orman recommends saving at least 8-12 months of your salary. Therefore, if you lose your job or quit without another job, you will then be able to pay your bills.
  • Health emergency – Health emergencies happen every day. What if you were left unable to work until you recover? Will your insurance cover your bills? If not, you need an emergency fund until you are well again.
  • Medical Bills – At times medical bills pop up. For example, your son fell off the bunk bed and broke his arm. You are now on your way to the emergency room. Moreover, an average trip to the ER is $1,233. (Source The Washington Post).  Again, with no emergency fund, you are forced to use credit cards.
  • House concerns – Owning a home can become a huge financial burden. According to Heating and Cooling by Cassel, a furnace needs to be replaced every 16-20 years. Other expensive replacements include roofing, water heaters, air conditioning, refrigerators, and other appliances. Furthermore, these repairs will come up eventually and will be expensive. Are you ready?
  • Car accident – Another true story: I got in a car accident and my new car was totaled. Besides major whiplash, thank goodness I was okay. However, I needed extra money to pay for a rental. I had to get to work and my commute was 30 minutes away. I also needed cash for a car down payment. Luckily, I had a small emergency fund at the time. It covered these costs and helped tremendously. Nonetheless, I had to build it back up after this incident.

Don’t Rely on Credit Cards for Emergencies

Credit cards will get you nowhere! Sure, they can help in an emergency, but you must factor in your interest rate. The human mind likes easy decisions. It is easy to swipe a card and not think. Yet, how much you will pay in the long run? It is just another bill, right? When you are only paying the minimum you end up paying an enormous amount more than what you initially spent.

How Do I Save for an Emergency Fund?

Maybe you don’t have extra money after the bills are paid. If this is the case, consider a side hustle until you can build up a mini emergency fund. Check out my post on How to Make Money Fast for some ideas or keep reading below.

It is difficult to come up with extra money but setting aside just $10 a week, will help you begin. That’s $40 a month or $520 a year. Most of us can manage $10 a week. I also suggest setting up a separate account specifically for your emergency fund. In this way, you are less likely to spend the money. However, if you literally have no money when the bills are paid, consider some of the options listed below.

Check out this Savings Challenge

Learn How to Save $1000 in Three Months

Earn Extra Money and Contribute to an Emergency Fund:

#1 No Spend Month

Have a “No Spend” month.  There are many great ideas on the Internet for things to do during a “No Spend” month. Put the extra money in your Emergency fund. Here is a great post on Tips for a No Spend Day or Week by Kristen Larsen at Believe in a

Reduce Grocery Spending. You can use cashback apps such as Ibotta or Checkout 51.  Also, consider using meal planning to reduce your monthly food budget. (Check out my Budget-Friendly Two-week Dinner Meal Planning for $75 for some ideas.)

#2 Cut our spending habits you can live without for now

Can you think of a few items you buy each week you really don’t need? If so, try cutting these items out for a while until you have your mini-emergency fund of $1000.

Forgo your expensive morning coffee for a month. If you are spending $4 on a cup of coffee five times a week, you would have $80 towards your emergency fund at the end of the month.

Do you eat out every week? The average family of four spends around $50 eating out at an average chain restaurant. Let’s say you do this once a week. That is $200 you could add to your fund. If you do it for two months you are already halfway to your goal. Remember, this isn’t a life sentence. Once you build your emergency fund, you can go back and treat yourself.

#3 Pack a Lunch and Save

Take lunch – Buying lunch daily can become quite expensive. Packing a sandwich, snack, and then drinking water, will save you a tremendous amount of money.

#4 Cut Back on Restaurant Splurges

Avoid pricey restaurants and save money by eating at home. Use meal-planning and coupons to save additional money on your grocery budget. Also, use up items in your pantry and freezer by adding them to your meal plan. If you need some cheap meal plan ideas check out the meal planning posts below:

#5 Cash in Gift Cards for Money

If you have gift cards you have not used or that have a remaining balance, you can sell them on sites such as for cash. If you have gift cards just sitting in your wallet and you don’t need them, then why not trade them in for money and build your emergency fund?

#6 Use a Budget

Use a monthly budget to help keep track of where your money is going and plan better for savings. Learning to live below your means and spend less than you earn, is key to building any type of savings. You must first write down your income. Then take some time to record your spending for a few weeks, including bills and everything else you buy. Once you have this information, you can start allocating money to the things you need and getting rid of purchases that are in the “wants” category for now.

#7 Get a Side Hustle for Now

Offer your services to earn extra cash. Some ideas are pet sitting, house sitting, and/or babysitting.

Sell your skills on sites like Fivver or Upwork. Have a talent that could help others? Fiverr is a great way to earn extra cash online.

#8 Cut unused subscriptions

Do you order magazines you don’t really read? Do you have a gym membership you don’t really use? I challenge you to look through your credit card bills and find at least one subscription you don’t use, you can cut. Perhaps you can cut a few subscriptions you do use for a few months to build up your emergency fund and then go back to them later.

#9 Sell Unwanted Items for Cash

There are many great online sites to help you make extra cash selling gently used items. My favorites are Poshmark (Poshmark is mainly for clothing and makeup. Use code NXUIA to sign up and receive $5) and Mercari (use code  UYYBUS receive $2). Letgo and Facebook marketplaces are also good sites to use.

This is a great way to earn fast cash. If you have clutter and clothing you no longer wear, snap some pictures and type a quick description to start selling online.

#10 Learn How to Fix Things

If you are trying to save, consider cutting your own lawn, cleaning your own house, doing your own nails, etc. until you have pumped up your emergency fund. If you are handy, you can also use Youtube to help repair things around your house, instead of paying big bucks for new items or a repairman.

#11 Seasonal Work

If you aren’t saving enough with the above, consider a part-time job for a few months while you are saving. Seasonal jobs around the Holidays are great for adding bonus cash to your fund. Places like Amazon and malls are hiring around the Holidays and this can be a quick way to build an emergency fund. The best part is, it is only temporary and once you have put in the work, you can relax a bit.

#12 Cut the Cord

Consider cutting your cable for 3-4 months to save money. Instead try Hulu or Netflix for under $10 per month, instead of paying $70-$200 a month for cable. Streaming is becoming the new normal. Many people love their Netflix and Hulu shows. Roku is also a good streaming device with free shows.

Click here to find the best prices on Hulu

Click here to find the best prices on a Roku streaming device


Save for an Emergency Fund Conclusion:

An emergency fund will give you peace of mind.  Furthermore, you will also feel content knowing you have built insurance for yourself and your family to use when needed.

Once you start accumulating your cushion, you will feel at ease. You can rest easy knowing you are able to pay any surprise bill that may pop up! Keep your head up and keep smiling! You’ve got it in the bank!

Please leave me a comment! Do you have an emergency fund?  How were you able to save?  Do you have any questions about Emergency Funds? I would love to help!

Until next time! Take care – Sarah

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Emergency Fund
Emergency Fund

Secrets to Saving for an Emergency Fund

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18 Comments on Secrets to Saving for an Emergency Fund

    • My emergency fund has helped me out so much! It just gives you piece of mind. Thanks for the visit. Best of luck to you. – Sarah

  1. These are all great tips. I recently (like 2 months ago) started couponing for groceries. I’ve managed to save at least $40 each visit and I put half of that into savings (I should put all of it in) but I use the other half to pay down other debts so its working out. My sister is teaching me her couponing tips and tricks where she saves 4x’s what I do.

    • That is awesome! At least you are saving something!! Kudos to you (and your sister :-)! I love couponing. Thanks for the visit. Take care – Sarah

  2. I’m actually working on our emergency fund right now. It’s small at the moment, but it is growing. I’ve been using digit and so far it’s working great!

    • It is such a great feeling to have money in the bank and a great lesson for kids! It sounds like your husband could give me a few tips! 🙂 Thanks for the visit! Sarah

  3. Thank you for wonderful tips! I’m already using Ibotta app that you advise and it works great… $101 earnings after just a few months for simple every week grocery shopping!

  4. we had one and good thing beacuse we needed to use it one time. if it wasn’t there i can’t even imagine what we would have done.

  5. My friends thinks that you should either have no savings or a lot of savings, since you can’t do much if you’re in between. However I always tell him you don’t just save for major emergencies. You save so that you have enough to tide through any minor “surprises” that Life throws at you. You have a lot of true story, but glad to hear that everything’s fine in the end!

    • Thank you so much Rhonda! Cheers to you as well! I checked out your awesome site and you have accomplished so much! Congrats to you!

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