5 Ways to Beef Up Your Emergency Fund

How much money would you have saved up in the event of an emergency? Finance experts recommend having between three to six months' worth of expenses saved in the event of any unforeseen emergencies. However, when money is tight, it can be difficult to set aside money in an emergency fund.

The following are the top five ways to increase your emergency fund during hard times:

1. Set a Saving Goal
2. Open a High-Yield Savings Account
3. Automated Deposits
4. Trim Expenses
5. Save Unexpected Windfalls

Set a Saving Goal

Saving money during difficult times can seem like an impossible task. Setting up small, achievable saving goals makes it easier to begin setting aside money for your emergency fund without feeling pressured or like you’re taking away money for your daily expenses. Aim for setting aside two weeks' worth of expenses, when you’ve achieved that goal, aim for a month, doing so will motivate you to continue saving.

If you’d like, read more creative ways to save money here

Open a High-Yield Savings Account

Your emergency fund should not be kept in the same account as your monthly bills/expenses account. You want your emergency fund to be in an account where it is easily accessible during times of need, but not too accessible that you would be tempted to spend it. One of the best places to keep your emergency fund is in a high-yield savings account that is easily accessible. This type of account ensures that you receive interest on the amount of money in your account. Just by placing your money into this account, you can boost your balance.

Automated Deposits

When it comes to saving emergency money, it’s often tempting to use your monthly income toward your expenses rather than putting away any money in savings. If you set up automated deposits, it treats your savings like a recurring bill and makes it less likely that you would spend the money on something else.

Trim Expenses

Having an emergency fund during difficult times is vital while some expenses aren’t necessary. Take stock of what your monthly expenses are and decide where you can cut back to use that money towards savings instead. Whether it may include cutting the cable bill, preparing lunches at home instead of eating out, or getting a cheaper phone plan, trimming your expenses allows you to increase the amount of money going into your emergency fund.

Save Unexpected Windfalls

When money is tight, the natural reaction to an unexpected windfall would be to use the money toward pressing matters. However, a smarter use for a sudden influx of money would be to put aside some (if not all) for a rainy day. Monetary Christmas gifts, monetary birthday gifts, and tax returns are examples of unexpected cash that could be used to boost your emergency fund. Since this money would not have been included in your budget for that month it should be easier to save it.

Jenn writes at her blog healthyhappyimpactful.com. She’s a mom of three looking to learn and grow. Check it out if you love helpful tips on health, family, and personal growth.