Statistics show that fewer than 4 in 10 Americans have enough funds set aside to cover a $1,000 unplanned expense. This could be a trip to the ER, a car issue, or a variety of other things. What can you do to put money aside for this type of expense? How can you prioritize this without dipping into debt? Who can help you in your effort to do this? Keep reading to learn about the ways to start an emergency fund.
1. Get a Quick Loan
This isn’t a solution to start your emergency fund, so much as a quick solution to a temporary problem. Personal loans come with high interest rates and if you’re not able to pay it back quickly, you’ll end up paying twice the price of the loan in the end, so be careful. These types of loans should only be used when there is literally no other possible option. Always avoid personal loans if you can.
Put simply, if you need the money right now for an emergency the best way to get it will be to apply for one of the online installment loans. This type of loan is quickly processed and allows you to get the money faster. Speed can be important when it is a repair bill that cannot wait until tomorrow or a medical expense that needs money upfront. Getting a quick loan doesn’t pull money away from your existing savings accounts. This is beneficial because you may have the money in those accounts going toward rent or a mortgage payment and using it for something else could affect your living situation.
2. Start a Side Hustle
One way to save up money for your emergency fund is to develop a new stream of income. Starting a side hustle can be as simple as becoming a dog walker in your neighborhood. This won’t take away anything from your current job, instead it is something that you can work on in your free time. Exclusively using your side hustle income to benefit your emergency fund can allow it to continue to grow in size over time. This can be helpful if all of a sudden your vehicle needs to be replaced instead of just repaired. Think of all of the things that you enjoy doing outside of work and see if any of them can make you money as well. For example, if you love mowing the lawn or landscaping, offer to do it for the elderly people in your neighborhood. This way the hours that you spend on it won’t be on something that you do not enjoy.
3. Sell Stuff
Whether you live in a big house or a small apartment, you likely have items that you don’t need or rarely use. Getting rid of these items can benefit you by cleaning your home and making you cash. This cash can go directly toward your emergency fund. This doesn’t mean you have to host a garage sale for 3 days, you can sell stuff online as you find things you don’t use anymore. One way to approach this is to go room by room and set aside anything that can be sold. Taking quality pictures and pricing the items to sell, yet make you a profit is important.
4. Cut Down Your Expenses
Sitting down to look at your finances and finding the reason why you don’t already have an emergency fund set up is an important part of getting started. Stopping one thing can allow you to start another. Let’s say you have 4 different online streaming subscriptions. Take time to evaluate how often you use each of them in a given week. From there, eliminate the ones that you use the least. You can always sign up again but freeing up cash that you have been using for those services on a monthly basis can allow you to relocate it in your emergency fund.
Think of it as paying your emergency fund instead of paying Hulu. If you have a cleaning service that comes to your home every two weeks, you could push this to once a month and clean the space on your own during the time they would normally come. You don’t have to cancel everything that you currently pay toward but scaling back your monthly expenses can help your emergency fund grow without a significant income change of any kind.
Get Started Today
Now that you have read about how you can get started on an emergency fund, you can put these tips into action immediately. While it may seem difficult at first, you will be thankful that you have it when anything happens to your car or any other emergency situation you find yourself in. Check out our website for more helpful articles like this one.
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