An emergency fund is important to have but not so easy to save up for. It is common knowledge that everyone should have an emergency fund and with money being tight, that isn’t always easy. The truth is, while money may sometimes be difficult to come by, there are still ways to ensure that you are financially prepared for an emergency.
How to Create an Emergency Fund On A Tight Budget
Sell as Many Items as You Can
There is hardly a family out there that does not have something they can sell. Go through everything you own to see what you can sell and then get started. Getting rid of items your family doesn’t need or use can help produce extra income for your emergency fund. You also have the added benefit of clearing out clutter.
Keep a Smaller Emergency Fund on Hand
If you are on a tight budget, it can be hard to set aside a large amount for an emergency fund. Start small. A small amount of money set aside in an emergency account is far better than none at all. Pick a goal and go with it, even if it’s a small as a couple hundred dollars set aside, it will still be there in case of emergency.
Increase Your Income
If you find that your budget is already stretched rather thin, it can be hard to take the necessary steps to build up your emergency fund. Increasing your income, even if only by a small amount, can give you some extra funds to set aside. Try to do side jobs like babysitting, landscaping or even dog walking to bring in some extra income. A little bit goes a long way so making the extra effort to bring in some extra money can have an extremely positive effect on your goals.
Cut Back Where You Can
One of the key steps to creating an emergency fund is to start a budget. Find out where all your money is going and see if there are places where you can cut back on spending. Maybe you spend too much on entertainment or eating out, maybe your cable bill is high, and you rarely watch TV or maybe that gym membership that’s collecting dust isn’t as necessary as you once thought. No matter where you choose to make changes, a little bit can go a long way and put you on the right track to creating your emergency fund.
There are many ways to make sure that you have an emergency fund available to you, even when you are on a tight budget. Being prepared in case of an unexpected expense is important to keep you away from going into debt, so make sure to start building your savings today.
Elizabeth Lampman is a coffee-fuelled Mom of 2 girls and lives in Hamilton, Ontario. She enjoys travelling, developing easy recipes, crafting, taking on diy projects, travelling and saving money!