Frugal Living

How to Save an Emergency Fund when You’re Broke

One of the most important steps to financial security is having an emergency fund. It’s thought that millions of Americans are just $500 away from being homeless if an emergency were to happen. While job security is up and credit card debt is down, we’re still struggling financially because we don’t have any emergency savings and those we do have are so meager that a single emergency would wipe them out.

Make a Budget

Budgeting is something that broke people know all about. When you’re living paycheck to paycheck there just isn’t room for saving money anywhere. When we’re not strict with our spending we tend to spend much more than we realize. How many times have you gone to the store for “one thing” and come out with a bag? This is because you’re not budgeting. By specifically allocating your money and sticking to it you’re less likely to impulse spend and more likely to save. Allocate money to an emergency or saving fund out of that budget, even if it’s not a lot.

Black Calculator Near Ballpoint Pen on White Printed Paper

One of the easiest ways to “unbudget” for those who struggle to stick with this idea I’ve seen is the $5 plan. If you get a $5 bill or even a $1 bill stick it in a jar to save. Often small amounts of money like this aren’t missed but they can quickly add up when you’re not noticing.

Side Hustle

This leaves you with only one option – make more. A side hustle or making extra cash doesn’t have to be a second job. Many companies offer part time or on your own time entrepreneurships which can lead to making more than your regular job eventually. While most M2M marketing isn’t profitable unless you’re a good sales person consider what skills you have and whether you can sell them. If you’re a photographer then what about stock images, if you’re a crafter make things, etc. Most people have marketable skills they don’t take advantage of.

Transfer a Credit Card

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This is one of the worst pieces of advice you’ll hear but it’s also quite smart. If you’ve had your cards for a while and have been paying them down then you may be eligible to swap them elsewhere. Look at cards offering no interest on balance transfers and no fees for X months. This allows you to swap your balance and continue to pay it down without a chunk of it going towards interest. Try and pay it off before the fees apply and close the card. You’ll be saving paying the interest and pay the card off quicker with less money. Once you’ve done this start putting half the money you were putting towards that card into savings and use the other half to continue paying down other debt.

Ditch Subscriptions

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Many of us love getting mail packages with monthly subscriptions, magazines etc. These all chip away at your income and will quickly add up. Ditch your subscriptions or consider calling some and asking for a lower rate. Many companies that offer insurance, for example, will lower your rate rather than lose you as a customer – especially if you’ve been a long term buyer. Amazon Prime will also refund a month of your subscription if your shipments are late. They also allow you to rack up credits by choosing slower shipping that can be used elsewhere on the site.

Sell Stuff

adult, books, business

It’s amazing how much stuff we have. We buy things we don’t need and are all guilty of buying things we want rather than need. If you got rid of some of your unwanted stuff you’d be amazed just how much you can make. Selling of your unwanted clutter frees your space up, can save you storage fees, and can make you some money to start your emergency fund off without having to actually save any money yourself. Toys, designer clothes, old jewelry, and hobby items are all big money makers.

 

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