How to Build Your Emergency Fund on a Low Income

A emergency fund gives you peace of mind knowing that your monthly expenses are covered when there is a an unexpected loss, such as loss of job, major illness, or unexpected death in the family.

But what if you’re living on a low income? Can you still build an emergency fund?

The answer is Yes! Even if you are on a tight budget, you should still be able to save for your emergency fund.

Making extra money on the side is one way to build an emergency fund.

Here are the other ways:

Related:

1. Start small to build your emergency savings.

The secret to build your emergency fund when you’re on a tight budget is to start small and save regularly.

For example, if you save as little as $20 per week in a high yield savings account earning interest, you can have $1000 by the end of the year.

As time goes on and if your income allows it, you can increase that amount to $50 per week. But the point is that it doesn’t matter how much or how little you’re saving, you just need to start and keep going.

Find the best savings accounts. Search today’s rates now.

2. Automate your savings.

Automate your savings is another strategy to build your emergency fund.

I call it set it and forget it.

Set up a separate high interest savings account for your emergency savings to go via automatic payments set with your bank.

You can also ask the HR department at your job to allocate an amount of your check to your high interest savings account.

That way your savings are growing without you having to transfer them every time you receive your paycheck.

3. Avoid impulse buying.

Some people say all the time that they can’t save enough money because they’re not making enough. Yet, they seem to have the money to spend on things they don’t even need.

Every dollar you spend on impulse buying is another dollar that you could have saved on your emergency fund savings account.

Related: 6 Incredible Ways to Stop Impulse Buying

4. Save your spare change.

Get a piggy bank and put your spare change into it. When the container is full, deposit the money into your emergency fund.

5. Keep adding to your emergency fund.

Whenever you get extra money, for example, a bonus or your tax refund, you can add this money to your emergency savings account. See this article for tips on how to spend your tax refund: 5 Smart Ways to Spend Your Income Tax Refund

Related:

Add Comment

Join our mailing list to find ways to MAKE & SAVE MONEY