10 Smart Ways to Build an Emergency Fund

Emergency Fund Square

There is nothing that can derail your financial progress faster than an emergency.  You think you’re doing okay, making headway towards your goals, and boom!  The refrigerator stops working, your car breaks down, or your child falls off her bike and needs four stiches in her chin and suddenly you are right back in crisis mode.

If you’ve read Dave Ramsey’s Total Money Makeover or taken the Financial Peace University course, you already know that the very FIRST step in regaining control of your money and avoiding yet another financial crisis is to establish an immediate emergency fund of $1000.

While that number may feel daunting at first, the truth is that there are plenty of ways to build an emergency fund quickly.  The key to success is being willing to accept the idea that getting your finances in order might not be fun or easy, but it will be worth the effort. Plus, the great thing about all of these ideas is that they will not only help you build your emergency fund, but they can also help you kickstart your debt snowball and get you well on your way to becoming debt-free!

Here are 10 super smart ideas to get you started:

garage sale tips1. Sell Something (Or Several Somethings)

Chances are that if you have found yourself in a financial crisis, you have probably bought more than a few things you either didn’t need or couldn’t afford along the way.  It is time to start cutting your losses by selling anything and everything you can.  Don’t hang on to things because you are afraid you won’t get what you paid—you won’t.  The money is already gone, but at least you will be making progress towards a solution.  Check out this post for great tips on how to sell your stuff on eBay, Craigslist, Facebook or at a garage sale (and for knowing which one to use!) And, if by some chance you still haven’t opened the item, see if you can return it to the store you bought it from!  (You never know!)

We sold out whole bedroom set for $900 and have been sleeping with the mattress on the floor for almost a year. Last week a friend came over to visit and saw that we had no bedroom furniture and the next day she GAVE us her whole set and bought herself a new one. God is always doing amazing things in my life like this!” ~Jade Hodge

I returned my Christmas present from my husband. It was a Cricut Die Cutting machine that I thought I wanted desperately. Guess what? I wanted an emergency fund and to be out of debt WAY more.” ~Andrea Vaughn

2. Get a Second Job

It doesn’t have to be your dream job, and if you are struggling to make ends meet, here is the brutal truth:  There is no job you are “too good” for.  Go work at McDonalds or deliver pizza or wait tables or clean houses or stock grocery shelves at night.  Check out the classified section of the newspaper or look on Craigslist—Jobs may be hard to come by sometimes, but I promise there are always jobs for people who are willing to work hard and do anything.

I went back to work and used every single penny or every single paycheck (this is not at exaggeration) for a full year to put towards my bills. I also had two HUGE yard sales and made about $1500. At the end of that year, all by myself I had paid off approx $22,000 in debt.”  ~Kris Stevens-Starks

I started dog sitting. I sometimes make more money dog sitting than I do at my “real” job!” ~Deb Foster

I started cleaning houses on the weekend and took the money from that and invested in items to embroider and sell…kind of started a little business all with the goal of paying off debt!” ~Daisy Work

Delivered Yellowbooks to pick up extra cash. Easy and got exercise while doing it without a gym membership!” ~Shawna Squibb

3. Work from Home

If going out and getting a job outside the home isn’t an option, consider finding a way to work from home instead.  Do you stay home with your kids?  Why not offer babysitting or after-school care for a few of their friends whose parents need childcare?  Are you good with computers?  How about becoming a Virtual Assistant?  Do you sew?  Why not offer a tailoring service or perhaps sell your own items on Etsy.com?  Are you able to spot a diamond in the rough?  You could salvage & spruce up old furniture then resell it on Craigslist.  Still not sure what to do?  These five ideas for making money online are a great place to start.

We cleaned out some big ticket “toys” (motorcycle, jeep, etc) to clear a line of debt and put a chunk in savings. My husband used the profit to buy a table saw that he now earns money with doing side projects. All side project earnings go straight to paying off debt. We’re free of a car loan, 3 student loans and 2 credit cards in the last 6 months. Thank the Lord!!” ~ Sarah Burmeister

As a graduate student, I bought designer gowns at the Salvation Army and resold them at trendy consignment shops. Financed my education for two years.”~Mary Walker

extreme couponing 1014. Cut Your Grocery Bill in Half

If the thought of starting your own home business is too overwhelming, why not instead start by cutting your everyday expenses?  Just a few simple tweaks to the way you shop for food can result in drastic savings at the checkout line.  Start by buying only what is on sale, then stockpile items when they are at their lowest price.  Eat less meat (and save on the meat you do buy), plan your meals using a budget-friendly service such as eMeals, which lets you plan your menu based on what is on sale at your grocery store that week (use LWSL15OFF to save 15% on your plan), or find even more dramatic savings by learning to use coupons.

I started monthly meal planning, so no wasted trips to the store, which saves a lot of money!“~Reader Leah Donn Scott

We save money by using coupons and combine them with sites like Ibotta and Checkout 51 that pay you cash for buying items you already buy like milk,cereal, eggs and bread. We also do a lot of meal planning freezer meals and take lunches to work.” ~Becky Tester

5. Save on Utilities

Spending too much on things like electricity, water, phone, or even cable is practically like pouring money down the drain.  Another great way to “earn” money from home is to start paying close attention to the money you are spending right in your own home without even thinking about it.  A little vigilance can go a long way!   Check out this post for 12 smart ways to save on utilities!

I ditched cable and got a roku box. Small savings month to month help a lot!” ~Reader Sarah Eckert

We called providers for every single bill we have (credit card, utility, phone, satellite, car, insurance, mortgage) and threatened to terminate our account unless they lowered the bill. Worked for every one, even the mortgage company! The key is you have to mean it, and have a number in mind that you want to pay. Don’t give up!!“~Carter Robinson

We live by candlelight every other week put the money we save on electricity into savings.“~Chris Schmeltzer

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6. Stop Eating Out

Believe me, I get it!  When life gets hectic sometimes eating out just seems like the path of least resistance.  After all, fast food is quick and easy and relatively cheap, right?  Wrong!  All those quick & easy fast food meals still add up to a lot more than you would pay to just eat at home, and just a couple of family dinners at a nice sit-down restaurant or a daily run to Starbucks could pay for a whole month’s worth of food and coffee at home.  Why not try scheduling a freezer cooking day to stock up on ready-made meals?   Or, if you’ve really got a craving, check out these great copycat recipes for restaurant flavor right at home!

We very rarely eat out, cut back on meat dinners and eat beans, lentils, etc instead. I’m a single mom with no child support or alimony and I’m still able to pay down and pay off my debts!” ~Karen Muri

I Gave up my Redbull and Starbucks addictions–it gave me an extra 300 a month.” ~Jennifer Bryan

7. Get Free Stuff

It is actually pretty amazing to find out how much stuff you can get for free or close to free once you really start looking.  Check out sites like Freecycle.org or the free section on Craigslist.org, or just drive around an upscale neighborhood on trash day to find things you need, or even to repurpose and resell.  Bartering with friends and neighbors for goods and services is also a great way to get the things you need for free, while taking advantage of online freebies and samples can help keep expenses down as well.

I scrounge around Goodwill frequently and rehab stuff to sell on Craigslist. Found a huge Pottery Barn rug at Goodwill once. Had a few stains but otherwise ok. Looked it up online, retail price was $250. Cleaned it, then sold on Craigslist for $80, and put that toward debt.“~Angie Doster

I stopped buying beauty and cleaning products, and turned to my pantry for all of those needs!!! It’s amazing how a little vinegar, baking soda, honey and lemon can transform into all that you really need!!! It adds up to hundreds in savings, and I squirrel the money away into my savings“~Bonnie Pierce

I picked up perfectly good toys in someone’s trash and sold them online in less than an hour” ~Cindy Gillis-Williams

8. Earn Inbox Dollars

If you haven’t already, sign up for Inbox Dollars ASAP then check out this post to see all the ways you can earn Inbox Dollars doing the things you already do anyway, such as searching the web or shopping online.  Signing up is super easy. Just fill out the form here.  You will even get a $5.00 bonus just for signing up when you confirm your email address.  The coolest part about Inbox Dollars is they actually pay cash–no need to trade in point for gift cards–and you can request to be paid anytime you hit the $3.00 minimum requirement. (Which isn’t hard!)  There is even a mobile app you can use to earn Inbox Dollars on the go.  Seriously, don’t wait–start earning right now!

9. Skip This Year’s Vacation

Here’s another hard dose of reality:  If you don’t have any money in your savings account, you can’t afford to go on vacation.  Period.  Cancel any and all plans to travel, because the truth is that between the gas, the lodging, and the food, (not to mention the unforeseen expenses that always come up), even the most frugal vacations still cost more than staying home.  Try planning a Staycation instead, or better yet, spend your week planning for & hosting a family garage sale to earn some extra cash!

We cancelled a vacation so our savings would not be touched.“~Rachel Carrier-Stone

10. Go on a Spending Freeze with Like-Minded Friends

Years of living in a “spend” mode can sometimes make it hard to stop, even when you know you should.  Even so, if you are committed to building that emergency fund then you need to resist the temptation any way you can.  The LWSL 31 Days of Living Well & Spending Zero Challenge has some fun ideas to help you make it through an entire month of no spending, and a great way to ensure success is to team up with others who are taking on the same challenge in order to hold each other accountable.  You can join thousands of current and past participants in our LWSL Everyday Community Forum for great discussions, creative money-saving ideas, and a ton of moral support.

Emergency Fund

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What are some things you’ve done to build your emergency fund or pay off debt?



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{ 23 comments… add one }

  • Danielle March 28,

    These are great. To pay off debt my husband and I both worked a ton of overtime. We sold one of our cars, our TV, furniture, and anything else we could, and we stopped eating out completely. We paid off $44,000 in student loans and credit cards in 17 months. It was SO worth all the sacrifice, and even though it was hard work, it brought us closer together.

    Reply
  • Sonya March 28,

    Great post Ruth! Having an emergency fund is so important and you listed many great ways to achieve building one. I like tip #10 Go on a spending freeze. I might add: A person really needs to evaluate who they spend a lot of time with as friends. If you have friends who don’t have the same value of being good stewards of money you may want to spend less time with them lest you are tempted to go on a perpetual spending spree with them. Been there, done that :(

    Reply
  • Nancy l March 28,

    We stopped eating out and a spending freeze when needed ,buy my groceries on sale cycles and clearance, and stock pile , buy my families clothes at the thrift stores all designer brands:) . It’s the best lifestyle change we have made as a family , I did the financial peace university (won a free membership) found a lot of Dave Ramsey and Larry Burkett books at thrifts stores , it’s work and sacrifice but last year we built our dream home . Thank you for your encouragement and wisdom and helping my family you never know who you really help with your blog, many blessing for you and your family.

    Reply
  • Linda Sand March 28,

    I bought a sewing machine so I could make and mend clothes. It took awhile to offset the price of the machine but everything after that was a freebie.

    Reply
  • Jennifer March 28,

    We employed many of the strategies you mentioned. We also sold our vehicle to get rid of a car payment (using the equity to buy a modest paid-for vehicle) and turned off our satellite cable service in favor of a $7.99 Hulu subscription. We’re big Dave Ramsey disciples and are almost done with the debt snowball!

    Reply
  • Lou Nelson March 28,

    We got rid of our land line phone and our cable TV. We each have cell phones and watch Netflix which only cost about $8.00 a month. This saves quite a bit of money to apply to paying off bills. We also moved from a 2 bedroom apt. to a one bedroom and that saved quite a lot too. I am 70 and my husband is 72 and he still works part time and I still work full time.
    He is a CNA for hospice patients and I do home care nursing for special needs children. I rarely buy clothes that are not on sale. My husband does the grocery shopping most of the time because I am an impulse shopper and he sticks to what we actually need better than I do.
    Please sign me Lou from Illinois.

    Reply
  • Christina March 29,

    This is a great list. We’ve done most of this already, and we are seeing major progress. Also, it’s really nice to know we aren’t the only weird ones out here saving money and reaching financial goals instead of buying whatever we want whenever we want it.

    Reply
  • Kristin March 29,

    I already do all these things. Do you have something that a poor person can do? Don’t have any more room to cut. All free sites come with a loooooong survey and an offers I have to choose from that I can’t afford and I don’t have a credit card or I don’t get to choose what I get for free. Usually what they want to give me is something I can’t use.

    Reply
    • Anonymous March 30,

      When you are poor there are a few things to look at. Of course I have very little information on your living situation. Food is always a big one. My grandmother always had us eat a banana before a meal so that food would last longer. She made sure to never use a dishwasher and only ran a trickle of water when doing dishes and made her bottle of dish detergent last one year. Turning off the water while shampooing, soaping and brushing teeth. We were very sparing of any disposable products, especially napkins or paper towels. Back then we had a brick in the toilet. It all depends on your family/home situation. All haircuts were at home. We washed certain clothes by hand because they would last longer.

      Reply
    • Valerie @ SavvySeekers May 2,

      Hi Kristin, none of the surveys on http://www.savvyseekers.com will ever ask you to buy anything. These are all reputable market research companies and they will send you the rewards they promise. You can look through the list and see which offer cash (most of them too). When they send you a survey you can see how long the survey will take and what the reward will be. Then you can decide whether you want to take the survey or not.

      Valerie

      Reply
  • Gladys March 29,

    These are really smart ideas! I just started reading Dave Ramsey’s Total Money Makeover (for free!). We cut our phone bills by switching to prepaid phones and paying only $38 a month for 2 lines and we also cut our grocery bills by having $65/week for a family of 4. And we are planning of holding a garage sale this summer! Can’t wait for more money savings!

    Reply
    • Samantha April 14,

      Gladys I would like to know how you cut your grocery bill to $65 per week for a family of 4?

      Reply
      • Gladys April 14,

        Hi Samantha,
        I base my weekly menu planning that’s on sale. I use some coupons which the store sends me every month (sometimes $1 off for $4 worth of produce or free facial tissue or peanut butter, it all depends how they track my grocery shopping), I cook (almost) from scratch like making homemade pizza,sloppy joes,cookies, bread etc. and we buy a lot of store brand items like cooking oil(with .40 cents off coupon that the store sent me and dish soap which is 50 cents cheaper than national brands. And we eat less meat that helps a lot, in short, every week there’s always a fish menu on my list which is so much cheaper.

        Reply
  • Lia April 13,

    This is wonderful if you have a spouse who is in agreement with you on cutting spending. I am married to a spendthrift and trying to keep him reigned in, without arguments, has been impossible and exhausting.

    Reply
    • Anonymous June 7,

      It is really important to involve them in the decision making! My husband is a reformed spend thrift! Part of that is his personality and part was a lack of training and awareness of the importance of sticking to the budget! For us we had to hit rock bottom and have been working with a debt consoldation company called Christians Against Poverty, and it was easier for him to hear the limits from someone else. My sis inlaw put her husband on a cash allowance! They had more to play with so the allowance was generous but still within reason (With his agreement after the first few major budget messes! Lol) and that allowed for all his petrol (gas) for the week and spending money. How frugal he was meant he could do more with his allowance. My other sister inlaw and her husband have the agreement that he can spend whatever he wants on whatever he wants as long as the money comes from his second jobs – not the main income!
      ALL of us have banned credit cards in our households and we work from debit cards. My husband and I are committed to NO new loans until our debts are gone. It can be done! Don’t let a partner who isn’t support be your excuse for not being a good steward! I did! For nearly 8 years I kept hoping my hubby would step up and when he didnt and I ended up having to sort out messes I really resented it. My attitude is so much better now I have accepted that I am more gifted in this area so I just do it!

      Reply
  • Daphne May 1,

    It’s hard to save when hubby loves his special foods. It’s a bit discouraging sometimes because I would happily choose store brands over big brands but I make cutbacks wherever I can. Currently, I have been making dresses for my toddler, and more to sell in a special section of our garage sale. I have every relevant couponun app I can find and I use them as often as I can. We receive Wicc so that really helps when it comes to feeding our child and I make most of our meals and we coordinate dinners with our parents once a week or so. Lastly, I babysit for a hairdresser and when I need a cut I have her deduct it from my earnings and we barter babysitting for other favors for each other!

    Ps I signed up to get an emailed copy of your guide but haven’t recieved it yet. I love your site and I have been slowly converting hubby by reading him your articles.

    Reply
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  • Lydia May 31,

    I love this list. Thanks for posting it. My husband and I only have an antenna, so we don’t have a TV service bill of any kind. We don’t have cell phones. (almost unheard of, I know!) We have managed to get by with one car, though it’s not easy. We buy a lot of our stuff from resale shops/yard sales. However, we don’t compromise when it comes to food. We buy organic when we can. (It’s hard to find where we live, lol.) I should add that we are empty nesters. Recently, we started a Christmas club account at our bank. Amazing! I would suggest that everyone do this, but not all banks offer it. It’s simple. We signed up to have money taken out of our paychecks and put straight into the accounts, then shortly before Christmas, the funds are available. If you have just $5 a week swiped from your check, (for a full year) you will have $250 saved, $10 a week will bring you $500, and $20 a week will earn you $1000!

    Reply
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  • Anonymous September 5,

    Another way to cut expenses is to use less laundry detergent per load. I use a liquid detergent (heard years ago that the powder detergents have added ingredients like sand since they sell by weight. And the sand or whatever added ingredient also wears out your clothing faster.) Also water down shampoo & dish soap. Fill an empty bottle 1/2 with water, then fill up with soap or shampoo. Use about 1 tablespoon vinegar to 1-2 cups water for hair rinse. Don’t put fabric softener in load of towels. They absorb more by being scruffy & not soft. Doesn’t hurt your skin that the scruffy towel rubs up blood circulation more & rids flakey skin. I also don’t use softener for the undergarments. In summer, don’t use air conditioner, only about 5-10 minutes before I go to bed. It is healthy to sweat. The rich & famous PAY big bucks to set in a sauna! I get that treatment for free during the summer. In colder weather, layer clothing instead of turning on the heat. This includes at bedtime. Pile on the blankets, it is healthier to breathe cool/cold air at night, while snuggled under blankets. Last winter was really cold, & I heated water & put in glass jars (from pickles, sauces, etc that have lids with some type of “seal” in them. This prevents leaking water.) Put under your covers about 15 minutes before going to bed to warm it up, especially where your feet will be. Can remove when you go to bed, or keep there all night, the water stays hot for several hours. I have been doing almost every thing suggested since the mid 70′s. also, grow a garden if at all possible. I am growing a little bit in flower pots on my balcony. Not enough to can or freeze, but every meal I get from it is a savings.

    Reply
  • Bonita Gordon November 9,

    Great ideas

    Reply
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