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Does this sound familiar? You’re broke and even a small setback could be disastrous. You want to build an emergency fund to prepare, but that might not be the right move to start with if you are broke.
If you have cut everything you can and paid off what you owe and still can’t build an emergency fund then you need to get creative.
First I don’t want you to worry about how much you should have. This will just cause you more stress thinking about how you will ever get to that number. Don’t go there just yet. Just think about saving money even if it is only a penny at a time. When money is extremely tight every penny truly counts.
Once you start to have some money saved start to think about what you want your goal to be. After you have some money saved you will feel better about being able to save and setting a goal won’t feel as overwhelming.
Time to get Creative
Open a bank account to get the bonus money.
I can’t count how many times I get an offer from a bank that wants to give me money to use them. Just be sure that you read over the offer to see what you must do to get the money.
They usually have a certain amount of money that needs to go into the account within a certain time and often by direct deposit. If you can meet the guidelines then go for it.
Also a warning, the money they pay you will be counted as income for tax purposes, but in the meantime, you get all of the money.
Get an old fashioned coin bank
There was a time that every little kid had a coin bank that they would eagerly fill with coins. We have moved away from that and if you only use a credit or debit card then you likely don’t get coins often. Don’t let that stop you from collecting coins. If you find them anywhere then pick them up. Or you can …
Start using cash only
If you haven’t been using cash to pay for things you need to be. This will not only allow you to spend less money and stick to your budget, but also get those coins to save. Plus it’s not as easy for someone to steal your cash from you as it is your card numbers.
My husband and I had 4 card numbers stolen within 6 months. It was a pain in the ass to deal with the card companies and one of them didn’t refund me $125. Though it wasn’t as bad as it could have been it totally sucked. We still use cards, but try to be safe with them and only for online purchases. I won’t even take a card into a store!
Save the change digitally
If you just can’t be bothered to use cash there are options to let you save the change. You could use Digit or Acorns.
Digit will charge $2.99 after a 30 day trial. With this company they move money from your account into an FDIC insured bank. You can make unlimited saving goals to move money into. Also there is a 1% saving bonus that is paid every 3 months.
This isn’t the best option when it is costing you $2.99 a month. My preference is Acorns. They still charge but have more options that make it worth the cost.
Acorns
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The great part is that the investments are re-balanced. As they state they are “Constructed with help from a Nobel Prize-winning economist to automatically rebalance when the market moves.”
Just remember that this is going into investments and not a savings account. So this is different from Digit. If you are a college student this plan level is free!
A nice bonus is what they call “Found Money”. This is cash back from businesses that you spend money with that are partners with them. Currently there are 200+ companies.
They have two other options which are $2 or $3 a month. For $2 you get the base program plus they recommend an IRA and portfolio that is right for you, the investments shift to match your goals, and set up recurring contributions.
The $3 plan gives you everything in the first 2 plans. They add on a checking account. This allows you to create a retirement savings account, use direct deposit, check cashing and free or reimbursed ATM fees.
Get a side job
This doesn’t need to be a part time job. It could be something that is really just a gig. It could be as simple as delivering pizza on Friday nights for 3-4 hours. Think of this as going solely into your emergency fund.
If that isn’t y our thing you could look for jobs on Craigslist or Indeed that are filler jobs. Like someone that needs a bookkeeper 1-5 hours a week. It could be anything.
The thing about these jobs is that they are so few hours that many people don’t want to do them. They usually aren’t enough hours for people. If you can fit them into your schedule they are perfect for emergency fund building.
Go without cable
Go without cable, Netflix, Hulu or whatever you are using for tv and movies for a month to 6 months. If you can do a year even better. The money really adds up. If you are paying for cable and your plan is $100 a month you save $1200 for the year.
If you have already cut the cable and only have Netflix standard that would save you about $155 for the year. This is not a huge amount, but remember we are adding this money with other sources.
Added Bonus: If you avoid watching anything for a while just think about how much more time you will have to do other things with.
Plan your food
There are few parts to this to really save money. First you need to know a ball park figure of how much money that you really spend on food in a month. Don’t go crazy with this just get an idea. Although you should get clear about this number later.
Don’t buy prepackaged foods
This includes things like frozen meals, cut veggies and fruit or portioned out chips and cereals. The only thing that you would want already done would be a frozen pizza. They are cheaper than making it from scratch or getting it from a pizza place.
Avoid the junk food
Things like chips and pop may seem cheap, but they are not the best use of your food budget to get quality food in you that will keep you full. These “foods” actually make you want more food and the more you eat the more money you are spending.
Cut back on food
This is a little difficult but could be great for you. If you know how many calories you need to maintain your weight (assuming you aren’t doing this to lose weight) you can plan your meals to get what you need and nothing more. Which means that you won’t overeat and overspend.
Find a healthy meal plan that has just the right calories so you buy only the food you need. If you want to lose weight you can plan that too and get healthy while saving money. Here is a quick calculator to figure you many calories that you need in a day just to function.
Don’t let any food go to waste
This is a downfall of many people. Myself included. They don’t use all of the food that they buy. Meal planning is the best way to be sure that you use everything you buy. A great way is to plan meals that repeat so you are using the same ingredients over and over.
Stop buying new clothes
Seriously, do you really need all those clothes? If you absolutely need something, try to buy clothes from goodwill, any resale shop or from clearance. If you have at least a week to 2 weeks worth of clothes, you don’t need anymore.
No spend month on steroids
You have likely heard of a no spend
I am suggesting that you take it a step further and go for 6 months to a year. Go extreme and deprive yourself of anything that you don’t NEED. If you spend $25 a month on “extras” that will get you $300 in the year. Not much for a sacrifice for a year, but this is extreme to build the emergency fund.
Sell everything that you don’t need
Everything that you haven’t used or even looked at in the last year or two should go. Sell it where you can. It could be a yard sale, Craigslist, Letgo etc. Every single penny should go into your emergency fund. Only keep what you use often and need or has sentimental value.
Skip the gifts
This is a little beyond extreme, but if you are broke you might not have a choice. Don’t give gifts for birthdays or Christmas. I know this is crazy. Another option would be to put a limit on the amount that you spend. So if you would normally spend $50 on a birthday gift try to just spend $20 or $30. Be sure to tell people ahead of time what you are doing.
Sell your car
If you don’t drive that much you might be better off to just pay for Uber or Lyft to get where you need to go. Work out the numbers and see if it will save you money. Add up costs of your car payment, insurance, gas, and maintenance.
Then look at the number of miles that you drive. Take those numbers and multiply it by $2.50-$3.00. This is a rough estimate of the cost per mile. Areas are different as well as times of the day. You can get a more accurate number by using the Lyft calculator. If you estimate that you will spend less money using a service than
Don’t forget
Don’t keep this money with your regular usable money. Get a different account only for the emergency fund. If you use Digit or Acorns you are all set. If you choose a traditional bank account then you can just get a basic savings
When you’re broke it can seem like you will never be able to save money. I know I’ve been there. But every little thing that you do can help you get where you need to be. With every penny saved you are moving in the right direction.
When you’re broke it can seem like you will never be able to save money. I know I’ve been there. But every little thing that you do can help you get where you need to be. With every penny saved you are moving in the right direction.
