I remember the first time I ready The Total Money Makeover by Dave Ramsey. I was in my early twenties and at that time I was hell bent on following his baby steps.
The good news was that I didn’t have much debt. I’ve been very fortunate that consumer debt never really appealed to me, even before I took an interest in personal finance.
The bad news is that I was making an extremely low income. Saving $1,000 for a starter emergency fund seemed like it would take FOREVER. (And it did.)
Now that I’ve gotten a lot better at managing money I can look back and see that saving that $1,000, even on a low income, could’ve been done a lot easier.
Here’s how to save for an emergency fund faster.
Use Your Tax Refund
If you’re currently living on a low income and have kids then there’s a very good chance that you receive a sizeable income tax refund.
If you’re already planning what to do with it make putting that $1,000 in your emergency fund a top priority. Put more in if you can.
This could possibly be the fastest way for to build your emergency fund.
Start a Side Hustle
Side hustles are popular in the personal finance community for a very good reason. The money you can earn from starting your own side business will almost always be more than what you could earn taking a part time entry level job.
Clean houses. Babysit. Freelance write. Flip stuff off of Craigslist.
Do something you enjoy and save all of that extra money.
Cut Back Your Spending Temporarily
Take a good, long look at your budget. Are there are a few things you could cut for the next 3-6 months? If so, cut that spending down and put the money straight into savings.
I’m telling you, it WILL be worth it.
My favorite savings “hack” is automation. Most people aren’t disciplined enough to save money themselves. That’s why automation is amazing!
Determine what you can part with and have it automatically put into a savings account each month or week. I have almost all of my savings and investing automated. When that money is out of sight it becomes out of mind.
You Need an Emergency Fund
You need an emergency fund. You really, really do. Especially if you’re currently trying to break the paycheck to paycheck style living.
Start by accumulating at least $1,000 and then re-assess from there. All the temporary sacrifices you’re making to get your savings in order will be completely worth it in the end.