Emergency Fund? Really?

Every source of financial advice suggests the critical need for an emergency fund. 

But let’s be real. It's hard to start an emergency fund when your earnings disappear as fast as they’re deposited. The income you receive today must immediately answer yesterday's bill. How can you save when everything is an emergency? 

This topic reminds me of a workshop I once attended called, “How To Save A Dollar When You Don’t Have A Dime To Spare.” 

Interesting, huh?

Saving Starts Here

In order to take on the monumental task of saving for emergencies, you first need a clear picture of your income and expenses. Start by reviewing your budget to find places where you can make adjustments.  

What? 

You don’t have a budget? 

OK, let’s back up. Here’s how to create one. Generate a spreadsheet, or just commit to the numbers with plain ole’ pen and paper.

Now for the hard part. 

Don’t worry. 

I have faith. 

You can do this!

Carefully scrutinize where your money goes. Are there any expenses you can decrease or eliminate? I don’t suggest completely denying yourself, but consider areas where you can lower costs with little to no sacrifice. Remember, you don’t always have to totally eliminate an expense. You can institute a step-down solution.

For example, try doing your nails yourself instead of paying for a monthly manicure. Consider whether you can survive with a less expensive cell phone or a plan that has fewer bells and whistles. 

The worst offender is subscriptions. I don’t suggest that you cancel all of them. Just do an honest assessment of your needs and wants, then keep the ones you can’t live without. 

I confess. Guilty as charged! For the past three years, I’ve continued to pay for a subscription I really don’t need. Can’t seem to let it go. 😬 

So, this is an obvious case of “Do as I say, not as I do.” 🙈

The point is to identify expenses you can eliminate forever or at least temporarily and commit the money you save to your emergency fund. 

Small Donations Help The Cause 

I always tell folks the easiest way to start saving is by socking away your change. These days, many of our transactions don’t involve cash, but occasions always arise when we get coins. Commit to putting all of your loose change in a jar or bank. 

A positive thing about Bank of America is its Keep The Change option. BOA ups each debit charge to the nearest dollar amount and then transfers the difference (change) into a separate account. 

Currently, I pay most of my expenses with a credit card and take advantage of my bank’s cash reward program (another way to save change). However, when I did use a debit card, I accumulated over $750 in my Keep The Change account.   

Saving change might not be a quick fix, but you’ll be surprised by how this painless way can add to your emergency fund.    

Windfalls Make The Difference

There’s nothing like receiving an expected or unexpected influx of cash. Next time you get your tax return, dedicate a portion to your emergency fund. Even though lottery tickets, like subscriptions, are an expense you should try to eliminate, add some of your winnings to your emergency fund from those tickets you purchased anyway. 😅

As you become a more sophisticated saver, you can experiment with assigning dual roles to your savings accounts. ICYDK – I’m an avid poker player. Because I’m also a serial saver, I have money set aside to fund this hobby. This pot of money also serves as my emergency fund. So, I dip into it whenever a poker game or a ‘life happens’ event comes along. 🤷🏽‍♀️ 💡

Want to know more about taking advantage of this concept? Here’s an article that reveals how BYOB (Be Your Own Bank) can make saving less overwhelming. 

BOTTOM LINE: The important thing to remember is that your efforts to grow an emergency fund will not produce overnight results. It takes consistent, disciplined attention to reap the desired outcome. But anyone who has amassed an emergency fund will tell you that accomplishing this goal adds to reduced stress and living wealthy.