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HOW TO SAVE MONEY & BUILD AN EMERGENCY FUND FAST: 10 WAYS
Let's be honest, life can be very unpredictable.
One minute you could have the best budget in place.
And then the next minute your boiler's broken down, then your car's broken down, or you hear that you're now in a recession.
And then on top of that, whilst managing to stay on top of your debts, guess what – you've lost your job.
Just like that.
Although these are hypothetical scenarios, they're are practical realities for many people day to day.
Many don't have the foresight or luxury of forward planning and unfortunately struggle due to unforseen events outside of their control.
Today we're going back to basics to talk about the emergency fund or as I prefer to refer to it, your “peace of mind stash”.
Table of Contents
BUILD AN EMERGENCY FUND FAST
We're going to talk about ways in which you can save money and build your emergency fund fast.
The ideas we're sharing today are practical ideas that you can explore if you are someone who is struggling to save even a basic emergency fund of 3 to 6 months of your monthly expenses.
In this climate that we're all living through and with huge uncertainty in the economy and for jobs, etc, having an emergency fund of at around 1 year worth of expenses is wise.
This ofcourse provides the necessary peace of mind and security that you need.
It's also critical on the journey towards financial independence.
In fact, this stage of the money journey is so empowering because it is a huge indicator that you've built up the muscle to fight the daily resistance of life in order to prioritise the future financially.
From here on, you're onto the high way of future abundance.
Before we get ahead of ourselves, let's zoom into some practical day to day opportunities.
My wife Mary and I had a discussion to come up with 10 ideas for how to build an emergency fund fast.
Join us in conversation… 😀
1 – EFFECTIVE MEAL PLANNING
The first point we're going to make on how you can save money fast and build your emergency fund fast is about food and meal planning.
Here you have the whole week of meals planned out for you.
So you know exactly what meal you're going to have every day for breakfast, lunch and dinner.
You shop according to your plan.
So the benefits is when you go shopping, you don't just buy unnecessary things and think “Oh, that looks nice that we just buy it.”
This helps to reduce wastage, because everything you buy is going to end up in a meal that you have carefully planned out for the whole week or for the month.
As a beginner meal planner, you don't have to plan out every single meal.
You could start by just planning out breakfast and lunch, for the week or night.
Or lunch and dinner.
We've created a really detailed post about healthy meal plan ideas and affordable ones that you can check out.
Get started with these meal plan ideas and start saving money today and building up that emergency fund.
2 – SERVICE BASED SIDE HUSTLE
We talk about side hustles a lot on this blog and that's because we love them.
By service based side hustles I mean something that you can do today, using your existing skill sets.
And the beauty of that is that you get paid immediately, you're not waiting a few months or even up to a year to get paid.
You use your existing skills to make money.
For example, if you are an accountant, you could offer bookkeeping services to individuals or into or maybe even to small businesses.
Mary, do you have any other examples?
Yes, if you're good at doing hair, you can offer a mobile hair salon.
Start with people that you know and then you take it from there.
That is a really good example and the other is freelancing.
It is another way in which you can use existing skills.
You might do freelance writing if you love writing.
Alternatively, use your existing skills to go on to freelancing platforms such as Upwork, People Per Hour.
Offer your existing skills on those platforms to get work that you can do now, over the next few days or weeks even.
Doing those bits of work see payments immediately to help you build that emergency fund.
To learn more about how you can increase your income this year, join us LIVE for our Free 5-Day Rocket Your Income Challenge.
3 – LOWER NECESSARY EXPENSES
Review all your necessary expenses and ask yourself “do I need all of these expenses?”
I say this because sometimes our circumstances change.
For example, with your mobile, you might not need as much data if you're at home where you can rely on your Wi Fi.
So see if there's anything that you can negotiate with the contract provider, or with your network provider.
Once you've done a review of all your necessary expenses, the ones that you do absolutely need, can you negotiate a better deal with the provider?
Anything you do here goes towards you accelerating and building that emergency fund.
You are making a recurring saving here.
Upon reviewing those expenses, you might have two or three that are due for renewal.
You then just need to make time and have conversations with the service providers.
I find that by making a phone call rather than just looking on the internet, I am able to find better deals.
This is because you can negotiate directly with the service provider.
For example, if you've been using a particular company for many years, you have a bit of an edge and advantage.
Don't leave money on the table here.
Negotiate with them to retain your custom.
4 – START SELLING THINGS
This is where you just look around your home for items to sell.
I can guarantee that if you did an audit of things around your house you would be able to make a list of unused items.
You have belongings that are just lying around. Think to yourself – “when did I last use it?
If you have not used something for 6 months, why are you hanging onto it? Seriously.
You will find that those things can be sold to make some extra money on eBay, Depop or similar platforms.
That gets you closer towards building that emergency fund a lot faster.
Mary, do you have any examples of things that people can maybe watch out for to sell?
So it could be furniture that you don't need, a bed, or a cot bed that your child has outgrown.
Great to sell if you are not planning on having any more children anytime soon.
Also children's toys, you would be surprised toys they don't need any more or play with, they could be sold on eBay or Gumtree.
Even old phones, right?
Lots of people get mobile phone upgrades and still have their old phones lying around.
That could make you maybe a couple £100's by selling it like Mary said.
5 – GET BUDGETING
If budgeting is done well, it will enable you to spend less. Think of it as a form of control.
The more respect you give a budget, the more it takes you closer to your goals.
Budgeting also gives you clarity on exactly how much money you need for your emergency funds.
And that number set as a goals lets you know how much you are working towards.
Budgeting also helps you actually build a habit.
This powerful habit is crucial if you're somebody who is working towards financial independence.
You need that habit of keeping your spending way below your income.
It helps you to create that buffer to not only build that emergency fund a lot faster, but to help you accelerate other goals.
E.g. Such as potentially looking towards investing your money in the near future.
6 – TAX REBATES
When you make those investments, if you're a higher rate taxpayer (40%) or additional rate taxpayer (45%), you can go back and claim more tax relief.
Typically, when you invest into your personal pension from your net income, what happens is that you get a 20% tax rebate automatically.
Higher and additional rate tax payers can go back and claim the additional 20% or 25% such that they get total 40% or 45% tax rebates respectively.
You shouldn't be taxed at all for paying into a pension.
So you are given back the tax that you paid already by making pension contributions from your net income.
If you are a 40% or 45% rate taxpayer, call the tax office or do it via your self assessment tax return, claim back that extra 20 or 25% respectively.
This can help you towards building that emergency fund a lot faster.
But the key thing is to make sure you call the tax office and tell them that you want it as a cheque.
Let them write you a check, rather than them editing your tax code and adjusting it that way.
If you get that cheque sent to you, you essentially receive a nice little windfall.
That can help you quite quickly build up an emergency fund if you don't have one already or if yours is quite small.
7 – OPT FOR FREE ENTERTAINMENT
The next way to build up your emergency fund fast is to swap paid entertainment for free entertainment.
We're talking about nature walks, park tours, the limit here is to your imagination and your creativity.
A change of environment can also make it feel like you're doing something different and fun.
We'd suggest getting other people involved as well (as safely as possible, ofcourse).
This essentially makes things more fun! 😀
As well as deferring that paid entertainment and saving money.
You could even do this for a season, such as a period of three months.
The money you would have used can contribute towards building up that emergency fund a lot faster.
You might even enjoy it so much that it won't for a short season, it might become a whole lifestyle change that you implement for fun.
Even if you invested in a good pair of wellies as it rains quite a fair bit here in the UK.
That could all be part of the fun.
If you have children, they will love the outdoors even more.
So it's not just when the sun is shining that you can actually explore the outdoors.
8 – DO A SPEND FREEZE
This is where you simply analyze your financial life and look closely at those expenses that you incur.
In particular, things or services that you really love having in your life but you could survive without having for a season.
This could be a few weeks, a whole month or a few months that you freeze those particular expenses.
You can always go back to having those expenses at a later date.
But the spending freeze frees up a fair amount of money.
This helps you work towards that position where you've built up at least three months worth of expenses saved in the event of an emergency.
Ken, that's a good point.
It could be turned in to a game or a challenge with some of your closest friends.
How long can you go without certain particular thing?
The good thing about this is that it's about delayed gratification.
You are not denying yourself totally as you are likely going to get that thing (e.g. subscription etc) back eventually.
But you're just trying to exercise a lot of discipline to see how long you can go without it.
At the end of the challenge, you might realize that you don't actually need this particular thing anymore.
And that helps you keep saving in that particular area.
9 – DO A SWAP PARTY
Let's imagine that you normally spend a particular amount of money every year on holiday.
And in the current environment, you might want to do a local holiday in the country, a staycation.
So how about considering saving some money and swapping homes with somebody else? Under the right conditions, ofcourse!
We've had a couple of friends who mentioned this idea to us, as a way for them to save money.
There are people who may live in a particular part of the country that you might want to visit, and they want to maybe visit your part of the country.
You could just do a swap with them, because that way, you both get a different experience.
By doing that you save a lot more money and build that emergency fund for yourself.
There could be something even simpler, like a clothes swap party.
I came up with this idea, Ken doesn't think that it'll appeal to men.
But for women out there, if you have a certain set of friends who may have a similar dress size as you and have the same dress sense, you can all meet together in one place.
Again, under the right conditions given the current situation.
You could take it in turns to host and literally swap clothes with each other.
Clothes that you have left over, you can just give it away to charity.
And it's a way for you to save money as you pointed out.
Yes, it's a way for you to save money.
And it's also an opportunity or you to catch up and have a good laugh of your friends.
10 – MOVE BACK WITH YOUR PARENTS
Crazy idea but we thought it would be a fun idea 😀.
It might not appeal to everybody, of course and you'd need to carefully considered the current global situation.
But this idea is one that will help you build up your savings very quickly.
Might not appeal to you if you've got kids already.
But if you're somebody who maybe lives by yourself, or maybe lives with a partner then this might appeal.
The beauty is that you save money on a lot of things that you might ordinarily spend money on by moving to your family members.
And it's fun, actually. It might be a good way to catch up with your family members, catch up with your parents, etc. properly for a few months.
Fun for people if you've got a relationship with your parents!
Chances are, you're not just living with your parents, you're actually still paying rent, but a much lower rate.
So you're helping your parents, as Ken said also catching up and having fun with family members.
And if your parents are not local, in a different country or they have passed on then maybe consider moving in with your siblings.
The key is that you absolutely save money.
And it's material enough for you to build up at least three to six months' worth of expenses because that will radically change your life.
It will you a lot more security, peace and comfort in the event that things go wrong.
What To Read Next:
Below are some other side hustle ideas:
What To Watch Next:
Here is a video version for how to build an emergency fund from our YouTube Channel:
Which of these ideas really resonated with you? If you're somebody who has managed to build their emergency fund fast, Let us know what how you did it? Comment below and share.
Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy.