In an emergency, you sure are happy to have savings. But if your relief soon turns to anxiety, you wouldn’t be alone. Plenty of people stress out when they realize their emergency funds are running low.
When your emergency fund is near empty, it’s important you restock it as quickly as possible. Otherwise, it may not be big enough to help as much — or at all — in the next emergency! Follow the advice below to help you expedite your savings.
Cut Down on Spending
Reducing your spending is the best way to rebuild your emergency fund. You need to reroute some of your money towards this essential financial tool — even if it comes at the cost of your latest streaming subscription.
To accelerate your savings, you may want to hit pause on most of your discretionary spending. This strict spending diet doesn’t have to last forever; stick with it until you sock away your first $1,000. That’s a good primer for your fund.
After reaching this goal, you can return to your smaller monthly savings contributions and reintroduce some of your discretionary spending.
In the meantime, consider these tips to help you limit how much you spend:
- Avoid online shopping for non-essentials, removing yourself from newsletters and sales updates.
- Don’t go to the grocery store hungry — research shows you spend 64% more on an empty stomach.
- Unsubscribe from overlapping streaming services and all box-based deliveries.
- Stop ordering takeout. Homemade meals are cheaper.
- Shop with a list to avoid impulse buys at the grocery store or drug store.
Make Your Essential Spending Work for You
All you want to do is save every dollar, but reality has other plans. Even when you’re being careful with your budget, you will have to spend money on groceries and toiletries. If you have to shop, make sure you capitalize on rewards cards and loyalty programs. You earn a little money back on the cash you have to spend this way.
Don’t buy something just to get the points; the item you purchase on credit should already be on your list. Use your budget and track expenses to ensure you only charge what you can afford to pay off in full by your due date.
Stack your rewards cards with shopping apps and extensions. You can find rebate services that pay you for shopping at certain online stores, and you can lower your overall total by using digital coupons.
Line of Credit in Emergencies
Don’t panic if an emergency happens before you can save much money. You can build a backup safety net for your savings through credit cards. And if your cards are full of everyday spending, a line of credit may provide an additional cushion. You just need to know where to look online.
An online lender like Fora provides fast, flexible, and transparent applications for sizeable lines of credit. A Fora Credit line of credit deposits approved funds into your account, so you can take on unexpected expenses without delay. Like your credit card, you may draw as little or as much as you need of your limit, paying interest on just the money you use. Please note that lines of credit have pros and cons to consider, including a potential high interest rate.
Reduce Other Savings
If you struggle to juggle everything all at once, look at your other savings goals. If you just increased your contributions to an investment, retirement fund, or vacation account, consider reducing these contributions and rerouting this cash into your emergency fund.
In the short term, your emergency fund is more important, but don’t forget to start these investments back up again when you save your first $1,000.
While $1,000 isn’t the ultimate goal for emergency funds — you should aim for three to six months of living expenses — it gives you a good buffer. Stick with these tips until you feel financially secure against the next emergency fund.
