It may seem like a daunting task, to grow your emergency fund but Dave Ramsey’s methods take the confusion out of it all. There are a few different ways to add money to your emergency fund without stressing and making sure all other bills are paid.
Simple ways to grow your emergency fund according to Dave Ramsey:
If there is even the smallest spot in the budget you can slim down. Cut out the gym memberships you may not be using now that the weather has changed. This will help you add a little extra money to your growing emergency fund.
Make simple cuts in your budget
5 Painless Ways to Cut Household Expenses
When we talk about painless ways to cut household expenses, the first piece of advice that always gets thrown out is “stop drinking $5 coffees every day”. Well, if you’re anything like me, you were never drinking $5 coffees every day anyway! $5 is a lot of money and it adds up fast.
Cutting household expenses and adjusting to a new budget doesn’t have to be too uncomfortable. Let’s talk about easy ways to make some simple financial changes for long-term success.
Conduct an audit.
The first step in saving money is to figure out what’s coming in, what’s going out, and most importantly, where it’s all going. Print off your bank statements for the past 3 to 6 months. If you’ve already made some recent changes, 3 months of bank statements will do. If you really want to dig in and figure out where your money has been running off to, print the full 6 months.
Grab a few highlighters and go through your bank statements line by line. Set it up however you want, but for example, you can use pink for income, yellow for necessary expenses, and green for unnecessary expenses or items to cut out.
Next, go through all of the unnecessary expenses and figure out which ones will be the least painful to cut. Make a list of which expenses we will cut first, second, third, and so on.
You can do this in phases so it’s not a huge change all at once. If you have big leaks in your budget and are drowning in debt, you should take this process more seriously and cut expenses as much as possible right away.
e found a great book to help keep this all straight: Busy Family Bill Organizer.
Grow Your Emergency Fund: Patch the leaks.
Rather than quitting everything cold turkey and cutting out all of your expenses at once (which isn’t realistic in the long-term), make small changes to “patch the leaks”, so to speak. Any money that’s unaccounted for month to month is a leak. Any money that goes to fast food unnecessarily is a leak.
Some leaks you may not think about at first may include utilities, food, and entertainment expenses. This doesn’t mean you have to cut out entertainment completely, or that you have to switch to the off-brand for all of your food.
It just means you’re going to be aware of where every single penny of your income is going, so you can make sure it’s accounted for and being spent responsibly. Everyone should have an entertainment budget, and nobody should have to eat off-brand bread! 😉
Cable, internet, and cell phone bills can make up a large chunk of your monthly expenses if you’re not careful. If you use the internet for work, downgrading to a slower internet speed isn’t practical. However, you can easily cut the cable and get Netflix or Hulu if TV is a priority to you.
Call your cell phone company and negotiate a lower rate. Ask about military or veteran discounts, AARP discounts, etc. Any discount they may have, see if you can get it! Some companies even offer discounts for law enforcement, first responders, and teachers. If the discounts are there and you qualify, you might as well utilize them.
Grow Your Emergency Fund: Watch your food expenses.
Even if you aren’t eating fast food every day, grocery bills alone add up fast. Our grocery bill was drastically reduced once we started meal planning and using curbside pick-up services. Ordering your food online and picking it up outside the store may be one of the best money-saving inventions ever.
Using curbside pick-up means no more last-minute impulse purchases in the checkout line. It means no more Target runs that should have been $50 but were more like $200!
Reevaluate entertainment costs.
How much are you spending on entertainment each month? Whether it’s a Playstation subscription or video game or going to the movies or bowling, what’s your budget? If you don’t have one yet, now is the time to work on creating one.
Like I said earlier, entertainment is important. We don’t need to cut it off completely, but being aware of how much we are spending and making sure it relates to how much it enhances our life is a critical step to cutting household expenses.
One last thing to check, if you didn’t with your audit, is your recurring subscriptions via Paypal. Also check your Cash App, Zelle, or other payment methods you use. The idea is to track every single dollar that comes in and goes out. Once you start doing this one simple thing, the rest falls into place rather seamlessly!
Grow Your Emergency Fund: Sell something
There can be a lot of stuff around your house that you no longer use. This is a great idea if you’re thinking of trying to downsize as well. Take an allotted amount of time to just check around your house, in the kids’ rooms, up in the attic; you’re sure to find something.
You can take some time to set up a few signs to do the marketing for you if you’re thinking of having a yard sale. Remember to make items your selling appealing to potential buyers; such as filling basketballs with air and simply cleaning the dust off any items.
This could be a great way to sell your things then you won’t have to list the items online to be sold. This would be the perfect time to sell things you no longer use or need to help pad your emergency fund.
Find additional income opportunities
Maybe you’re only working part-time or maybe you’re already working full-time. Getting another job will solely help your emergency fund if you choose to let it. It can be anywhere from a part-time job to only a few extra hours a week.
You can find a one-time additional income opportunity if you look. You can be a babysitter, dog walker or sitter if you love dogs, or a freelance writer, or maybe a graphic designer. Anything that draws your attention or something you’re already good at.
The beauty of all your hard work is that all the extra money you’re making is going towards your emergency fund. You can choose to become your own boss by joining a direct sell company you’re interested in.
If you choose to direct sell a lot of companies allow you to build a team, which could earn you even more money for your fund.
Grow Your Emergency Fund: Get another job
Getting another job is a great way to line the emergency fund as well as giving you something to do with your free time.
You can drive for companies like UberEats, or you can create your own streams of income online like hundreds of thousands of others do every day. No matter what your financial situation is, it can improve with planning and budgeting!
If you are wanting to grow your emergency fund then you’ll have to be willing to go the extra mile. Any of these ideas are a great way to get you where you’d like to be within your emergency fund.