An Emergency Fund is essential! Especially when trying to get out of debt, but building an emergency fund can take time. Right now we are following Dave Ramsey’s Baby Steps and #1 is Save 1,000 for an emergency fund.
To me that looked like it would take forever. Where would we come up with $1,000 extra bucks?
Know what? It wasn’t that bad and as of 7/9/15 our Emergency fund was fully funded! Woohoo. And the best part is that it’s exactly 7 months later and we have not touched it. We’ve actually earned money on it!
If you need to jump start your emergency fund start with these simple ideas:
- Start a bare bones budget. Pay your “needs” first. Needs are things like rent, food, gas, payments on your vehicles, utilities.. things like that. Check out this post on Wants vs. Needs for more info.
- Cut out non necessary expenses for now. You don’t need cable if you don’t have an emergency fund or if you’re in debt and can’t make ends meet. Just saying. I am a hardcore #TWD fan and I go watch it at my mom’s house every Sunday. Any money left over after paying your “needs” goes straight to savings. See this post for ideas on saving money now.
- Open a separate bank account. I highly recommended Capital One 360.We use Capital One 360 for the emergency fund savings. I like the online banking and I like that it’s separated from our main account. I honestly think if the money was in an account in our regular bank we would have used it by now. The fact that it’s “out of sight out of mind” really helps. Transfer the money each time you get paid. If you transfer right away you won’t be tempted to use it.
- How can you earn extra money this month? Pick up some overtime, mow lawns, babysit, sell items at the flea market or craigslist or FB yard sale groups.Whatever you have to do just do it. You may be tired and cranky for the extra work but it will be worth it in the end. You’ll end up with your emergency fund fully funded and peace of mind!
Already have your emergency fund fully funded or almost there? What are you doing to find that extra money? Leave a comment below.
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We have certainly cut way back in our budgeting in the hopes of getting debt paid off. But I agree with Dave that the $1,000 emergency fund is a must have first! Great tips.
Thanks Jamie! We are currently in cut back mode too! Feels weird, but I don’t mind being weird! Thanks for stopping by!
We’ve taken Dave Ramsey’s classes too!! Hubby disagrees with a few of his principles, like paying off all debt immediately…some things, like his school loan, has such a low interest rate, we actually make more money investing instead of paying off that debt. You have great tips though!! We are trying to rebuild our savings after buying a car last year, and we use many of your tips listed. 🙂
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This is a great post! Some really great tips! Thanks for sharing at #HomeMattersParty
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Excellent ideas here! Every family can benefit from having an emergency fund. Thank you for sharing them on the #HomeMattersParty
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Great tips!! We went through the FPU course and now have everything paid off, except the house – which we’re working on! #HomeMattersParty
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Jamie that is so awesome and encouraging for me. I went through FPU when I was single. My husband has not but does listen to Dave’s show and is totally on board with going debt free! I can’t wait to get there but it’s a process!