savings bank with an emergency fund
savings bank with an emergency fund

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7 Easy Ways to Build Your Emergency Fund

An emergency fund can be a big relief when unexpected expenses pop up. That stash of money may help you purchase something you really need. It can also help you avoid credit card debt or borrowing money from friends and family. With a little bit of planning, you can create some financial protection for those rainy days.

Here are 7 easy ways to build your emergency fund:

1. Save Your Tax Refund

You may be tempted to splurge and buy something fun with your tax refund, but think hard before you do. You probably don’t really need a new smartphone or a big TV and that money would better serve you if you save it for when you might really need it. Most financial experts say you should have enough money saved to cover at least six months of your regular expenses. Do you?

2. Save Your Bonus Pay

This idea is the same as those tax refunds. If you work at a job where you get annual holiday bonuses or even a bonus for a job well done, deposit that money directly into a savings account. Since it is extra on top of your regular pay, it’s a good way to save money because you won’t have any less than usual to spend on everyday needs.

3. Save Your Coins…

Yup, this good old fashioned way of saving is still something to remember! Make it a habit to empty the change out of your pockets, wallet, or purse at the end of each day. The more you use cash, the faster your savings will add up.

4. And Save Your Virtual Change

Similar to what you would do with physical change, you can sometimes save “change” when you use your debit card too. Your bank may offer you the option to round up when you make purchases and automatically send the “change” to a savings account. This is a great option when you want to make sure you save but don’t want to think about it — it’s done for you automatically!

5. Use Direct Deposit for Your Paycheck

You may already have your paycheck automatically deposited into a checking account. Add a savings account to that! Once you set up a savings account, you can ask your human resource or finance department to get you the forms you need to divvy up your money between accounts. You can usually select a set amount or percentage of the check to go in each account. This is another way you can build a rainy day fund without the need to continuously manage it. 

6. Cut Your Budget Where You Can

Do you really need all those cable channels? Could you eat out less for a couple months or switch to a less expensive cellphone plan? Sit down and look at all of your expenses each month and you might be surprised to see how much you spend or where the money goes. Reconsider your budget and look for places where you could cut costs. Even better, create a budget that incorporates how you can save money each month.

7. Sell What You Don’t Need

If you want to build an emergency fund fast, a good option for you might be to look around at what you have and decide what you don’t need. Between traditional garage sales and various apps and websites that allow you to sell your unwanted clothes and other belongings, there are more opportunities than ever to make money off of things that someone else could get more use out of.

Want more ways to build your emergency fund? Check out these 50 money saving tips and add the savings to your growing piggy bank. And if want to know about a really smart investment, invest in yourself! Charter College offers career-focused programs in Aviation, Business, Healthcare, Information Technology, and some trades. Contact Charter College today to learn more.