6 Neat Ways to Build Your Emergency Fund
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Some of us are creative thinkers, especially when it comes to making excuses about saving for our emergency fund. From the weak economy to falling dollar to the high gas prices, I seem to hear something new every day. To break the trend of using our creativity to think of excuses, I challenged myself to instead think of some not so obvious ways to build an emergency fund. I actually had fun doing it but what’s more important is for those struggling to build an emergency fund to try this.
Treat the Emergency Fund like An Expense
This one might not be so creative, but why not add a twist to it by having your family member bill you for it? This actually works best if your kids collect the money because late payment is not really an option! By doing this, it also involves your children in a real world situation earlier in life which gives you a chance to teach him about finance issues!
Pretend Everything Cost 10% More
If we automatically put 10% of the purchase price into our emergency fund every time we buy something, we will very quickly build a big emergency reserve! Doing this makes everything more expensive, so if we are disciplined enough to implement this, it may even help us buy less.
Alternatively, doubling our utility bill will also work the same way! Be creative!
Save Every $5 Bill
I can’t claim that I came up with this idea because a lady already managed to save a good amount of money doing this. I bet it was fun every time she was receiving cash!
Pretend Gas is $5 a Gallon and Save the Difference
Gas is $4 a gallon and although we are all complaining, it hasn’t been the end of the world. If it increases to $5 a gallon, we will for sure find other creative ways to save and manage to get by. To try this idea, figure out how much money we will spend if gas is $5 a gallon and put the difference in our emergency funds.
Rewards from Credit Cards
If you use a credit card without a generous reward program, do yourself a favor and switch to one that does. Once you start receiving the rewards, transfer them directly into your emergency fund!
Sell Your Old Stuff
Everyone has stuff lying around the house that can be sold. Start selling them and put it into our emergency fund! (Maybe if we put that the reason for selling is to build an emergency fund, people will actually not haggle you as much on the price!)
Any Other Suggestions?
How do you save money for your emergency fund? Do you have a creative way to entice yourself to save? We’d love to learn from you so please share with us!
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It’s a Labor Day Carnival of Debt Reduction | Mighty Bargain Hunter on August 31st, 2008 at 10:03 pm Says:
[...] Ning has six neat ways to build up your emergency fund. (Having an emergency fund is just as important as reducing your [...]
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Weekend Linkage - September 1, 2008 on September 1st, 2008 at 10:54 am Says:
[...] 6 Neat Ways to Build Your Emergency Fund I like “Save Every $5 Bill” [...]
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Carnivals of the Week 9/2 to 9/7 | On a Quest To Be Debt Free... on September 2nd, 2008 at 5:31 pm Says:
[...] Ning has six neat ways to build up your emergency fund. (Having an emergency fund is just as important as reducing your [...]
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Carnival of Financial Goals | rocket finance on September 4th, 2008 at 7:56 am Says:
[...] MoneyNing double dips on this carnival and posts 6 Neat Ways to Build Your Emergency Fund. [...]
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Carnival of Financial Learning #15 - Google Timeline Edition | Financial Learn on September 7th, 2008 at 9:39 am Says:
[...] presents 6 Neat Ways to Build Your Emergency Fund posted at Money Ning, saying, “Various ways that you have not tried to save for your [...]
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How to Put Together an Emergency Fund | Loanio on October 23rd, 2008 at 6:47 am Says:
[...] Setting up an emergency fund is actually quite easy and although it can take a few months to get to the point where you won’t have to worry, you’ll have the satisfaction of knowing that you’re saving ahead for your future. This makes it a lot easier to keep going and keep working on building up that emergency fund. [...]
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I like to practice what I call “dishonest accounting” with my paycheques. I get paid bi-weekly, but all my bills (except my mortgage) are monthly. I plan my budget based on 2 pay periods per month, leaving me with 2 “bonus” paydays every year. I use these extras to pay down my debt, but you could just as easily use them to up your savings funds.
It may not be a fast way to build cash, but it works!
Recycle! If you live in a state that charges you for buying cans or plastic bottles (like California does) then you are paying a five to ten cent tax on every container that you purchase (a 6-pack costs you an additional 30 cents). Definitely recycle your own bottles and cans and save the money, but if you don’t already drink soda or bottled beverages be sure that you benefit from the laziness of others and do recycle their stuff for them.
Or you can try what David Bach suggested from his book. Do it automatically!
Simply put, have your income (maybe 5-10% of your income) automatically transfer from your payroll and deposit it into your savings account before you even have access to it. As they say it, you cannot spend what you cannot see.
By the time you’re 60, you should have more than a million without even knowing it.
Sam
Fix My Personal Finance
http://fixmypersonalfinance.com/
When balancing my checkbook, I round every payment up to the next full dollar integer in the ledger, capturing 25 cents here 75 cents there. With hundreds of bill payments per year, this adds up to a few hundred bucks each year in the checking account. I just posted on a topic like this for saving tips for college freshmen. Timely and important article MoneyNing, thanks for posting.
Every ‘odd’ check goes directly to the savings/investment account. This could be a rebate, a tax refund, an insurance refund, a check from the health insurance to cover something I already paid for, a birthday or Christmas gift check, etc. If it’s a gift check (out of state family), I deposit it in the account, and then, if I chose to, I spend up to an equal amount out of my personal checking account for the gift I decide to buy. That way I get the gift and savings
I also put every third paycheck into savings - I get paid twice a month - altho once in a while it’s the fourth paycheck, and not the third.
Plus I have a property sales check that comes in every month - that check goes directly into the savings/investment account also.
Basically, any windfall that comes my way goes directly into savings. Plus all my dividends and interest income are either reinvested automatically, or go into the savings account automatically.
Automatic deposits are not available thru my employer, so that idea won’t work for me.
I am a big believer in the automatic savings plan at a separate bank. I do most of my banking with Bank of America but set up a travel fund and emergency fund at ING Direct. Every week, $12 goes into travel and $17 goes into emergency (not sure why I picked those numbers — just seemed like not too much and not too little). I barely even notice them disappearing from my checking account each week, but after a few months I have way more in my savings than I realized. I also try to add extra money to those funds whenever I can or whenever I get a windfall, but I really believe in having small automatic transfers, too. It really helps build a solid fund with you barely even noticing.
I really like your creative ideas and recently canceled my gym membership and plan to put the $30 towards emergency account. Lot’s of fun ways to cut costs and put it towards savings. I like the gas idea, but it would be hard for me to consistently move money. Some of the other readers have already suggested it, but auto saving is the way to go.
This post has been included in the 141st Festival of Frugality, going live at Almost Frugal September 2nd 2008. Don’t forget to link back to it when you get a chance.