As much as I’d like for life to be easy, it’s not. The truth is, life can be tough. It’s not always rainbows and unicorns. Unexpected expenses and emergencies are a part of life. When you have an emergency fund, paying for unexpected expenses doesn’t add stress to your life. This post offers tangible advice on how to save money for an emergency fund so you will be prepared for unexpected expenses.
Yes, Everyone Needs an Emergency Fund for Unexpected Expenses
Do you have money in savings for unexpected expenses?
Do you have an emergency fund?
You should! I’m updating this post today because I recently had an event that made me thankful for our emergency fund.
My 5 year old had to go to the hospital twice over the span of one week. It’s not going to be a cheap bill! On top of that, he’s had 3 doctors visits at $110 each.
While I’m worried about a lot of things in my life right now, finances isn’t one of them.
Want to know why?
We have an emergency fund. We save money each month just for unexpected expenses like this.
Life is stressful enough, I don’t want to be stressed about finances too! That’s why we choose to buy less, and save more.
Related Post: 10 Money Rules to Live By
Emergency funds aren’t just for “poor” people.
I personally know plenty of people who make way more than my husband and I do, but still live paycheck to paycheck. I’ve heard stories from financial planners about people with million dollar houses that go to retire, but can’t afford their mortgage or property taxes.
If you don’t have money in the bank for emergencies, aren’t planning for retirement, or run out of money each month then you need this advice on how and why to save for unexpected expenses.
How to prepare for unexpected expenses:
There is no quick and easy way to build up an emergency fund. Plenty of bloggers offer free printables to help you build up an emergency fund (I personally love this one).
Those kind of things are great, but how exactly are you supposed to find that “extra money” to put into savings?
Little things like using coupons, and taking paid surveys can help, but in order to truly save for unexpected expenses you should do the following:
1. Set up a savings account with direct deposit from your paycheck
I love this trick!
Go to your bank and set up a savings account. Ask them to take out a certain amount from each paycheck and add it to your savings account. If you never see it in your main account, you won’t even miss it!
Think of it as “paying yourself first”.
Make sure to be smart about this one though. Don’t be overly ambitious by taking out too much money. Start small and take out more each month if you can. The idea is to NOT touch that money except for big emergencies.
2. Side hustle/ pick up an extra job
Side hustling is a great way to bring in extra money.
There are a ton of ways to make money online: blogging, freelance writing, selling on Etsy, working as a virtual assistant, selling on Amazon, etc. You can also try working in direct sales, babysitting, driving for Uber, etc. The possibilities are endless with side hustles! Check out this complete list of side hustles.
Related Post: Why Every Stay at Home Mom Needs a Side Hustle
3. Live beneath your means
This is my favorite advice, but probably the hardest for most people. Here are a few ways to cut out expenses and live beneath your means:
Stop hiring a house cleaner. Think it through. Would you rather put $200 in savings for retirement/ emergencies/ kids’ college, or would you rather your house be clean?
Stop buying new things. If you feel the need to shop, take a walk around Goodwill or another thrift store. Buying used is trendy and good for the environment.
Move to a cheaper place. Mortgage or rent too high? Move! Plenty of people in the world live in small living spaces. It can be done and should be done if you can’t afford to put money in savings.
4. Stop dining out
This goes hand in hand with living beneath your means. Instead of dining out for lunch and dinner several times a week, try brownbagging your lunch and then reward yourself by buying premium groceries for a fancy homemade meal at the end of the week. Cooking at home can be fun and saves you a ton of money. Once you learn to cook delicious meals at home, you will probably even be disappointed by the quality of most restaurant meals!
If you need some cheap date night ideas, read this post.
5. Get a degree or certification
Don’t have a degree or professional license/ certification and find that you have a hard time saving money?
If you said yes, maybe it is time to go back to school.
Consider evening classes or online classes so you can keep working while you are in school. Often times financial experts will say that furthering a degree won’t help you save money if you are spending money to get the degree. Personally, I disagree.
If you can’t find work with the qualifications you already have, it might be time to get new qualifications.
I want to make sure you all realize that I recognize that doing these things won’t fix all your financial woes. However, I do truly believe that if you are careful with your money, work extra jobs to make money, and save your money carefully, then you can live a happier life because you’ll be able to build up an emergency fund organically.
Do you have enough money in savings for emergencies, unexpected unemployment, retirements, and college for your kids?