What to do if you don't have an Emergency Fund? (2024)

Income + Budget

By MillitaPosted on March 19, 20200 Comments

What to do if you don't have an Emergency Fund? (2)

This post is also available in: Български (Bulgarian)

Most of us think that we will figure it out later, or when we actually need the money but when the struggling times come we panic. That’s why it is important to start saving when you don’t need to. But the pandemic right now is a fact and if you don’t have your emergency fund already in this article I’m giving you a couple of ideas on how to save money now. Also, these ideas can be used in future when you don’t need them anymore but already know it will be way better to use them.

Contents hide

1 So.. what is an emergency fund?

2 Look for items around your house to sell

3 Cut some monthly expenses for a while

4 No eating out(or ordering food) until your emergency fund is full

5 Freeze your spendings for a month

6 Pay yourself first

So.. what is an emergency fund?

An emergency fund is just a sum of money you put aside that you will only use in an emergency situation. I will repeat that you must only use this money in an emergency situation. And by emergency I mean – if something expensive happens(your car gets really broken, or your health is in danger) or if you lose your job. Going on a vacation doesn’t count here. There has to be a different fund for that in your budget.

The sum of your emergency fund depends on your monthly expenses and in most cases, you can calculate it as all of your monthly expenses x 6(months). If you can spare more – good for you. So for example, if your monthly expenses are $1000 your emergency fund must be at least $6000. And if you use part of it you have to try to recover the sum.

It really depends on you to decide how much will you spare. If 6 months sound too much for you aim for less – even if you have $1000 aside you will be way more comfortable if something happens.

In this article, we will try to find at least $1000 that you have right now but don’t realize it to make sure we have 1 month covered.

Look for items around your house to sell

I know how easy it is to buy lots of stuff that you think you will use one day and you actually never use. So look around your house for items that might be useful to someone else. Old cameras, clothes, old phones.. Then you can list them on eBay or on a Facebook sale group. Make sure that all the money from selling these items goes to your emergency fund. Right now it is crucial. One little trick – just imagine the money doesn’t exist and put it in your saving jar.

Cut some monthly expenses for a while

You won’t die without a new haircut if you skip it for a month or two. Also, inspect your monthly budget and see where you can cut some of the expenses – maybe you have food that you can use instead of buying more? The gym fee – while you are stuck at home no need of that. You can search for some utility bills that can be reduced – your cell phone bill? Using less water and electricity… small steps every day make a big difference.

Again here make sure the money you are saving is going in your emergency fund.

No eating out(or ordering food) until your emergency fund is full

Right now a lot of the restaurants are closed anyway so this will be pretty easy. So make sure to spare your money and put them aside instead of ordering food online.

Freeze your spendings for a month

Even though most of the steps we’ve mentioned so far will do this automatically I decided to put it in a separate point. You can even create a game and just decide that for 30 days you won’t spend any money on things you don’t need. And by need, I mean really need like food and electricity. Cut all the going out expenses and the new clothes you can live without, all online orders of things you just want.

Pay yourself first

This is something I started doing maybe a year and a half ago and was the best decision in my life. What does it mean to start paying yourself first?

When you get your salary make sure part of it goes to your savings account – you decide what will be that part. For me, it was between 10% and 30% depending on my predictions of the following month. But make sure every time you get your salary to put this money aside. Pretend they don’t exist. And watch how quickly you start to grow your savings.

There is this even more hardcore way of doing that – even when you need to use part of your savings pretend you don’t have them and make your brain think of ways to make money. Ask it questions – “how can I make money now? how to deal with this situation? what can I do to pay my bills now?”. Our brains love answering questions so it must give you an answer. If you just decide “I don’t have money” you don’t challenge it to think and to give you options.

In the posts below you can find more ideas about saving money:

In the end, the most important thing is your will power – your desire to feel more comfortable and secure in the long run, your ability to prepare yourself for the future.

These are my ideas for saving money quickly in a moment of crisis. Do you have an emergency fund? If yes – what tactics you use to keep it full? Share in the comments down below!