These days, there’s a big focus on health and well-being especially as a lot of people are working where they live. More and more people feel isolated and alone. If this is important to you, then a budget is also very important for our financial health and well-being. By now, you should already have a budget in place. If you do, you get 500 brownie points. If you don’t, go to these two posts first and come back here when you’re done:
The other thing that’s important is having an emergency fund of $1000 or 3-6 months worth of living expenses.
What is an Emergency Fund?
An emergency fund is something you set aside for unexpected and/or unplanned expenses because well, life happens, right?
Some examples are car issues, home maintenance stuff like your roof is leaking, appliance stuff like the washing machine broke or your water heater is no longer heating up, etc.
These are real emergencies that can happen to anyone and if you’re not prepared for them, you would probably pull out your credit card and getting into debt for it.
The emergency fund is also referred by its other names…
My mom used to call it the RAINY DAY fund, others SH*T HAPPENS fund, or LIFE HAPPENS fund.
I’ve also heard others call it MURPHY’S fund because when you’re broke, it seems that Murphy is a tenant in your house. Emergencies seem to happen ALL THE TIME. If this is you, I hope that this post helps you come up with creative ways to save your first $1000 in your emergency fund.
A caveat…
The emergency fund is for emergencies ONLY. A Black Friday sale is NOT an emergency, nor is a BOGO shoe or purse sale. Emergencies are something that you cannot ignore. A sale is something you can ignore because so many more comes up after that.
Now that you have an understanding of what an emergency fund is, you need to be able to quickly save up for it before any other emergencies happen so when they do, you do not have to go into debt for it. Instead, you can tap into your emergency fund to pay for real emergencies.
If you have debt, i.e. credit card balance, car loan, student loan, etc., the recommendation is to start off by saving $1000 on your emergency fund.
If you do not have any other debt apart from your home loan and you’re investing 15% on your retirement, the recommendation is to save up an emergency fund equal to 3-6 months of living expenses.
For those living paycheck to paycheck, this might be a stretch especially if you’ve never saved before.
Let me ask you this though — are you tired of just getting by?
Are you exhausted from trying to keep up with your bills and never getting ahead?
Does it feel like there’s always an emergency for you to deal with when you’re already so deep in the gutter?
If this is you, then take this as a challenge to stop living paycheck to paycheck. And please, don’t believe in the lies that you can never get ahead. Other people have done it. My mom did it. I did it. Believe that you CAN change your family history and it starts with YOU.
You see, I grew up seeing my mom with a mountain of financial worry.
I’ve seen her work day and night just to make ends meet.
I’ve witnessed how she would skip meals because there wasn’t enough food for all of us.
I’ve seen her have sleepless nights worrying where our next meal would come from.
I have witnessed my parents argue, throw things at each other, and scream at each other because of money.
I have seen how my mom begged her mom and her sister for help when there’s really nothing else she could do.
I often cried myself to sleep praying for all our financial woes to end.
While I was powerless to change things then, I made a vow to myself that I will do whatever it takes to change our life.
And that’s all it takes — a ferocious desire to get out of your current situation.
An unwavering commitment to do whatever it takes to change the trajectory of your life and the rigid discipline to follow through.
All it takes is to be so tired of your current situation that you wanted to scream NO MORE at the top of your lungs.
But that’s not enough.
Do something about it.
You CAN do something about it.
When my mom passed away in 2012 and my grandma in 2009, their bank accounts had savings on them which helped pay for their own funeral expenses. Both of these women are savers.
While we were blessed with the funds to pay for the expenses on our own, do you see the type of blessing this loving gesture gives a grieving family? It tells their family that they’re thinking of them and that they care enough to make sure that their passing will not be a financial burden to those they left behind. This was probably their “rainy day” fund (my mom’s version of an emergency fund).
They also passed away with no debt but and with paid off properties. They weren’t rich. My grandma was receiving social security every month after working for 40+ years. My mom was getting financial help from me. But they were able to set aside some funds so that they have money to draw from when the need arose.
Do you see the importance and the blessing of an emergency fund, not only in your life but in your family’s life? Wouldn’t it be such a blessing that when our time comes, we’d be able to leave our families with true legacy and not debt?
I hope that this gives you the inspiration and the motivation to get at least a $1000 in emergency fund saved up. This is your protection from borrowing against the future because tomorrow is never guaranteed.
Are you ready to do this and get your first $1000 of emergency fund in place? Let’s get to it then.
1. Add a savings goal into your budget
In your budget, add a category called Emergency fund, or whatever you want to call it. Since this is a fund, the money you put into this category rolls over month after month. If you have a $200 goal to save month after month, that’s instantly $1000 saved in 5 months!
It’s important that you keep this fund separate from your checking account so you don’t “accidentally” dip into it for non-emergencies. You can either have a savings account tied into your checking so it’s easy to transfer the funds for real emergencies. Or, you can open another checking account from the same or different bank so you have a separate debit card for that which you’ll only use to pay for real emergencies.
If you’re using an app like EveryDollar (the one we’re using to keep track of our budget), you can add the Emergency Fund category into your budget and it’ll keep rolling over the fund month after month for you. Just make sure that you also manually transfer that money you allotted in this fund to your emergency fund savings or checking account as soon as you get your paycheck.
2. Sell items in your house you no longer need or use
We all have stuff sitting in our homes that we no longer use or need. Why not use a weekend to clean out your closet, garage, or rooms in your house and gather all the items you don’t use to sell?
If your community allows it, hold a garage sale one weekend and you’ll be amazed at how much money is sitting in your own home.
You can also sell stuff on Craigslist, Facebook Marketplace, Ebay, Mercari, Poshmark, etc.
If you need to ship, make sure you factor in the shipping costs including the shipping materials into your price.
3. Make stuff to sell
If you have a hobby, perhaps there’s a market for that.
For example, if you have a cutting machine like Cricut or Silhouette that you can make crafts from, why not sell those? There’s a huge market in Etsy, Facebook Marketplace, and Amazon Handmade for these items. Just take a look at those online shops and you’ll see what they have out there.
If you’re into knitting, embroidery, crocheting, woodworking, calligraphy, etc., there are also a demands for those items.
Just a caveat though, make sure you don’t spend a ton on materials and use what you already have.
Once you have money coming in, set aside a portion of your income for the materials but make sure you also set aside earnings to fund your emergency/rainy day fund. After all, you want to earn money off of your hobby, not spend more on it.
4. Have a side hustle
There has never been a time when so much side gigs are available. The demand for online shopping and deliveries have skyrocketed when the pandemic started. People appreciated the convenience and safety of getting food and groceries delivered right to their doorsteps. We love having this option when we do not feel like taking a trip to the grocery or to the restaurant.
DoorDash, GrubHub, Uber Eats, InstaCart, Amazon Prime, etc. are always looking for delivery drivers.
For us, when we opt for deliveries, we make sure that we leave a cash tip on an envelope with a Thank You card inside. It’s meant to encourage and reward these hardworking people who brave the pandemic and sometimes, inclement weather to hustle.
Before you embark into such an opportunity though, do your research on the pros and cons.
For example, insurance companies have gotten wiser and will no longer cover damages or accidents resulting from a delivery run. Research the type of insurance you need, any additional costs like equipment that you need to provide, safety protocols, your earnings, etc.
My recommendation is to go into these gigs with your eyes wide open. It also helps to talk to those that are currently doing these gigs if the money they earn is truly worth it. You have to factor in the cost of additional insurance coverage, gas, wear and tear to your car, and your time and effort.
Other side gigs include becoming a virtual assistant, teaching english as a second language (ESL), pet sitting and/or walking dogs, lawn care, etc.
With everything, my recommendation is do your due diligence and make sure you know all the facts before you venture into it.
5. Evaluate your recurring payments or subscriptions
Companies love recurring payments because most of the time, people merely set it up and then they forget about it, think it’s too much hassle to cancel, or are too lazy to cancel.
Think subscriptions like gym memberships, streaming apps like Netflix/Hulu/Disney+/etc., cable/landline, online delivery fees, etc.
Make it a point to evaluate these on a regular basis to check if you still need them and whether it’s worth your money.
For example, you signed up for a gym membership because you want to get yourself into shape but if you haven’t stepped foot in the gym for a while, it may be time to cancel that membership. You are only making that company profitable but it’s not doing you any good. This applies to other subscriptions as well.
Y’all, this is your money and you’re wasting it if you’re paying for something you’re not actively using.
If you feel that cancelling is just a hassle, do this — add all your unused subscriptions and see how much you’ll be able to save every month. Then, multiply that savings by 12 and you’ll see how much the savings can pile up. Use this total amount to fuel your motivation into cancelling them.
Believe me, you’ll feel relived afterwards.
6. Evaluate your budget where you can trim down “fat”
Once you’ve identified the subscriptions you no longer need, get into gear by cancelling them ASAP.
Then, your next step is to evaluate your budget to see if there are areas where you can trim down the stuff you don’t really need, but more of a want (also referred to as “fat”). You can also take a look at your previous months’ budgets and see where you’re spending a lot of money on.
Are you an avid coffee/latte drinker and you’re spending way too much on your coffee/latte addiction?
Are you spending way more on groceries because you head out to the grocery when you’re hungry and without a list?
Do you spend some serious moolah on restaurants and take outs?
Do you spend on shoes/bags/clothes every month when you no longer have space for them?
Do you buy brand names even in groceries?
Do you tend to buy on a whim?
If you’re any of the above, it is time to take a deep dive into your budget and figure out what you can cut out of it.
It’s ok to reward yourself once in a while but not often.
To motivate you to save, why not take a portion of your savings to spend on anything you’d like?
For example, get an agreement with your spouse (or with yourself if you’re single) to take 10-20% of your savings to spend on whatever you like. You’ll be amazed to see how frugal you can get when you’re motivated to take 10-20% of that savings to spend on yourself, LOL. You get to reward yourself by being intentional where you spend your money on.
Again, if you’re not feeling motivated enough, add up how much savings you’ll get in a month if you trim down the “fat” on your budget and then multiply that savings by 12. You got yourself some serious cash, didn’t you?
7. Shop for home and car insurance quotes often
I must admit, for years I have had the same home and car insurance because they’re convenient and they’re reasonably priced, or so I thought.
When we moved to Texas in 2019, I was forced to shop for insurance. It was then that I realized that there are cheaper alternatives out there with the same coverage.
Now I’m evaluating our home insurance premium every year and every 6 months for our car insurance premiums. Sure, I had to spend time researching and getting quotes from different companies but I have been able to save in doing so.
First, you have to figure out the coverage you want.
Second, get quotes from different companies for the coverage you want. In our case, we found a reputable insurance agency who was able to shop for us and provide us with different options to choose from based on our coverage requirement. In case we have claims, we’ll only need to contact them and they’ll be our liaison to the insurance company. For a busy mom like me, this is a HUGE timesaver.
Also note that you can potentially save more if you bundle your car insurance with your home insurance. It’s not always the case so you have to do your due diligence and do your comparison.
You can also apply the same principle if you’re paying for your own health insurance. However, note that health insurance would depend on your age and overall health. Something to keep in mind is that if you are older and have health issues, your premiums will be higher.
8. Cut your own lawn
Cutting your own lawn instead of paying someone to do it is also a money-saver.
In our case, we were able to buy a refurbished pre-owned lawnmower from a reputable repair shop with raving reviews in Yelp for a fraction of the cost of a new one. And because we got it from a repair shop, he will gladly repair the lawn mower if there’s ever an issue. We even got recommendations on what gas to put on and how to care for it so it will last a really long time.
Prior to this, we were paying $50 a month on lawn care. We paid $120 on the lawnmower and my husband has been mowing our lawn since.
If your excuse is that it gets too hot out to cut your lawn, then do it very early in the morning.
Lawn care companies in Texas start mowing lawns at around 7am because it can get very hot mid-day during summer.
Thankfully too, lawns do not need to be cut during fall and winter, at least around here.
9. Cut down on utility cost
We are a family of 5 with electronics galore!
There are a number of electronics plugged in at any given time, especially during the surge of the pandemic when I was working from home full time and my kids were doing virtual school.
We have our air-conditioning on during summer 24×7. We do not have a solar grid on our home.
Even with all these, we keep our electricity usage to a minimum.
During summer, we pay around $150 in electricity even when the A/C is on 24 hours a day, 7 days a week. The most we’ve paid is $190 but it turned out our A/C had a leak so when we got it fixed, it went down to $150 again.
During fall and winter, we’re only paying $50-$75 on our electric bill.
Even when we were in California, our neighbors were amazed at how little we were paying for electricity because theirs is way more even when there’s less people in their household.
The trick is to be energy efficient.
Our home is dual-zone. We only use the 2nd floor when the kids are sleeping, we have guests, or on movie nights so the A/C upstairs is off throughout the day.
All our appliances — refrigerator, TVs, washer/dryer, dishwasher are energy efficient.
We have surge protectors throughout the house to plug in our electronics.
We replaced all bulbs to LED light bulbs throughout the house.
We regulate our thermostat to only be high at certain times of the day and lower at times when it’s cooler.
Our house has very good insulation that when it’s scorching hot outside, we are comfortably cool inside.
Everyone in our family is trained to turn off the light when not in the room.
During extremely hot summer days (think 100s), we close the blinds so the A/C doesn’t have to be on high.
We put our computers to sleep when they’re not in use.
Even without a SMART thermostat, we are able to save on electricity costs. We just set ours to cool up and down during certain times of the day and when it’s not too hot, we turn the A/C off during the night and only have the fan running.
We also make it a point to get our A/C tuned up during spring so it runs efficiently and reliably throughout the summer months.
If you’re in a deregulated state with options on electricity providers, shop for cheaper alternative when your contract is up.
We also apply the same principle to water and gas. My kids are trained not to linger in the shower and to bundle up during cold season. We only turn the heater on when it’s absolutely necessary and again, we regulate the thermostat up and down depending on the time of day.
10. Do your own minor home maintenance
These days, all kinds of information is somewhere on the Interwebs. If you need to fix anything around the house, I assure you, there’s going to be a YouTube video teaching you how to do just that.
My husband is our resident home maintenance guy. Truth be told, he learned to fix anything around the house through YouTube. He looks up the information, buys the materials he needs, and fixes it. These minor fixes has saved us thousands of dollars alone.
While paying a professional is still recommended on major issues like water heater, A/C, or heater not working; plumbing issues; furnace issues; roof leaks; etc. which are better left to the professionals who will be able to fix it well and would even guarantee their work.
However, anything minor around the house like replacing a torn rubber in the washing machine, or a part in the microwave, or fixing the faucet leak, or fixing the sink erator, etc. can be done by looking up a video in YouTube and doing it yourself.
There are also DIY stuff like painting walls around the house, replacing the flooring, and many others can be done yourselves especially if you are meticulous and have the patience for projects like these.
11. Cut cable or satellite subscription
We’ve had cable for as long as I can remember. It’s convenient but it’s also very, very pricey.
When we moved to Texas, we finally cut ties with the cable company. When we found our home, we did not even consider bringing cable back. We cut ties with them FOR GOOD and we’ve never looked back!
The same is true for satellite subscription companies.
The average American household pays $50 to $100 in cable TV alone. That’s $50 to $100 a month in savings right there!
If you’re an Amazon Prime member, you can watch movies or TV series for free with Prime Video.
Some mobile subscription companies offer free Netflix or Hulu so you can check that out too. For example, with Sprint (now T-Mobile), they offered us free subscription to Hulu which we still have, to this day. Our friends who are with Verizon got free Netflix with their mobile subscription.
If you’re a big sports fan, consider subscribing to ESPN+ which is about $5.99 a month + tax as of this writing.
To be honest, we’ve never missed cable since cutting ties with it 2+ years later.
12. Evaluate your mobile subscription
If you’re like me, it took me almost 15+ years to realize that I was being charged way too much on my mobile usage!
The only reason why I had to shop around for a new mobile service was because my son was entering middle school and his school then was 10 miles away from our home. He would need a cellphone so he can get hold of us if there are emergencies and we can communicate with him as well.
I found a provider that charged us the same amount I was paying for the 2 mobile services but with 5 phones (including my kids) with unlimited talk, text, and data!
You can also consider pre-paid plans or no contract plans.
You can try calling your provider’s customer service and see if they can offer you a lower rate especially if you’ve been with them a long time.
Did I mention we also got a free Hulu subscription with it and 10GB of hotspot from each phone every month?!
13. Unsubscribe from email lists that tempt you to buy
The Covid-19 pandemic of 2020 (and beyond it seems) has brought so many businesses to its knees. Some of them have had to close their doors for good after years of service to their customers.
While brick and mortar shops have suffered, online businesses flourished. Even delivery services like InstaCart, GrubHub, DoorDash, UberEats, etc. grew in high demand.
Have you noticed that all of these online sellers and retailers would ask for your email address? This is so they can market to you at any time, hoping that their marketing strategies are enticing enough for you to buy. And believe me, some of these retailers and sellers are very good at marketing and if you haven’t clicked buy, you’re at least tempted to do so.
If you want to stop yourself from being tempted and, eventually buying, the quick fix is to unsubscribe from these emails so you won’t hear from them again.
Another food for thought is that these sellers and retailers are paying for their mailing list and if I’m not interested in buying, I don’t want them to waste their time (and finances) on me either.
If I frequently hit the delete button on specific seller’s email, it’s a signal for me to hit that unsubscribe button.
14. Cook more and pack lunch to avoid take outs / dine ins
One good thing as a result of the pandemic is that as a family, we were able to cook more at home and stay away from take outs or restaurant dine ins. It was definitely more cost-efficient plus we know what goes into our food, not to mention making sure that everything is sanitized and clean.
Even when I was going to the office, I usually pack my lunch.
To save on groceries, we usually plan our meals on time and buy only the ingredients for those meals.
I’ve also organized our pantry so we can easily see what we’re running out of. Then, I don’t buy any more than 3 items at a time. For example, if I’m running out of tomato sauce or pasta, I only buy 3 at a time for each — 1 to use and 2 others to stock in case we have guests coming or there’s an emergency like a Covid lockdown or a winter storm – because you never know what else we’ll have to stay home for… 😉
When the lockdown started in 2020 and then Texas experienced the worst winter storm in history on February of 2021, we were prepared to weather them because we have food that allowed us to survive staying indoors for a while.
15. Use coupons and cash back apps
I used to have an envelope with coupons inside so I will just pull it out when I’m shopping. These days though, the coupons have gone digital so I no longer carry an envelope with me — think apps like Ibotta, Rakuten, Groupon, RetailMeNot, etc.
- Ibotta is great for grocery shopping because it shows you what’s on sale at that particular grocery store. You buy the item as normal, keep the receipt, and when you get home, you can scan the receipt and upload it into the app or scan the UPC code of the item you bought and voila, you’ll get the discount as a form of cash back to your account.
- I have used Rakuten way back when it was called Ebates. You get cash back on purchases made from retailers Rakuten has agreements with. The only caveat is that you have to use the Rakuten app to get to the online store you want to buy from. Once you’ve finalized and paid for your purchase, you’ll get the cash back into your Rakuten account.
- Groupon is an app that provides deals for services or products. You can search for a specific service (nail spa, spa, facials, tire change, car service, etc) or products through the Groupon app and see if they have deals near you. You have to make sure that you check the expiration of the promotional value you purchased though. The only downside is that once the promotional value expires, you can no longer use it.
- When buying things online that Rakuten do not have cash back agreements with, I also tend to check RetailMeNot to see if they have coupon codes for these merchants. I would sometimes get somewhere between 10-20% off on some of my purchases.
Gone are the days when you have to scour all the newspapers to find coupons to use when shopping.
These days, it is so convenient because they’re right at your fingertips. Just make sure you use the coupons for items you truly need to buy.
Promise me you won’t buy things just because they’re on sale, ok? That totally defeats the purpose of saving.
And once you’ve tapped into your emergency fund, remember to quickly refill it by doing any or all of the steps in this post dedicated to providing you with ideas on how to save your first $1000 in emergency fund. The same ideas apply when you need to refill your emergency fund.
However, if you’ve added a savings goal to your budget, you would be in a much better shape and would most likely have more than $1000 in your emergency fund. If this is you, great, great job! Keep at it and before you know it, you’ll have 3-6 months of living expenses saved up!
Please hear my heart on this — when you have an emergency fund in place, emergencies become mere inconveniences rather than catastrophes.
Murphy moves out of your house because you have EF (emergency fund) as your tenant.
You get to have peace of mind.
You get to sleep well at night knowing that you can weather storms with your rainy day fund.
To summarize, here are 15 ideas to save up your 1st $1000 (or consequent 3-6 months of living expenses) in emergency fund:
- Add a savings goal into your budget
- Sell items in your house you no longer need or use
- Make stuff to sell
- Have a side hustle
- Evaluate your recurring payments or subscriptions
- Evaluate your budget where you can trim down “fat”
- Shop for home and car insurance quotes often
- Cut your own lawn
- Cut down on utility cost
- Do your own minor home maintenance
- Cut cable or satellite subscription
- Evaluate your mobile subscription
- Unsubscribe from email lists that tempt you to buy
- Cook more and pack lunch to avoid dine ins / take outs
- Use coupons and cash back apps
May this post become a blessing to you and your family. May it encourage and inspire you to take the necessary steps to save your first $1000 in your emergency fund so you no longer have to whip out your credit card when emergencies happen. May the first $1000 energize you to continue to save 3-6 months of living expenses.
Lastly, I would love to hear from you. In the comments below, tell me which one of this list are you already doing and which ones are you excited to try? Are there any other ideas you have that are missing from this list? If so, I would love to hear them too.
Live with intention friends and you’ll find that there’s truly joy in meaningful living.
