It’s crises like the ongoing COVID-19 pandemic that further demonstrate just how necessary it is for all of us to have an emergency fund to rely on. Recently it’s the increase in unemployment and lowered income that has been posing a challenge for all people to keep up with their financial responsibilities.
But it’s not too late to finally start building your own emergency savings to ferry you through tough times. Here are five foolproof ways you can save up for the uncertain future.
The best way to start filling up your savings account without thinking about it too much is automating money transfers to it. This method is the opposite of the usual way people save by only setting aside the leftovers of their monthly budget.
Automating savings involves ‘paying’ yourself first even if it’s just as little as $5 a month. Once you get the hang of it, you can increase the transfer amounts.
If you’re still using cash frequently, make a habit of rounding up all the spare change you come by and keeping them in a piggy bank or even just a cup.
Deposit your money into your emergency savings account once your containers fill up. An alternative is using finance apps like Qapital, Digit, and Chime, which all lump change you would’ve accrued while shopping with a credit card.
Refunds & Bonuses
Since almost three-quarters of American taxpayers receive a refund when they file, chances are high that you would get one as well. Now, instead of splurging that refund check on something you want, you can put it towards your emergency savings.
Extra Income Streams
Now is probably the best time to put your untapped skills, resources, or extra time to work. Find ways to use them and find side income streams to supplement your regular salary.
Got a car? Why not sign up to drive for services like Grab or Uber? According to The Street, the average rideshare driver makes $8.55 and $11.77 per hour.
That may not be a lot but that income would still help you build your emergency fund fast.
We all got a lot of stuff we keep at home that we don’t really need any longer. Raid your garage and closets for things that other people might want from clothes to unused tools.
Put them up for sale on eBay or Craigslist. Use your earnings to pad up your emergency savings.