One of the very first steps you can take to get your finances in order is to create an emergency fund. Most financial experts will tell you to build one such account that holds $500 to $1,000. This is so you will rely on your savings rather than credit cards when unexpected expenses arise in your life. In my own efforts to become debt free, I created an emergency fund. I placed the money in a good online savings account. You always want to place the fund in an account that you can access quickly, but not easily. So, I chose a savings account with ING Direct. They offer one of the best savings accounts that I know of and require no minimum deposit. Plus, if you find a promotional code online, you can sometimes get an additional $30 from ING just for opening the account and depositing $30. In addition, their savings account rates are often much higher than the ones at the banks in your local area.
4 Ways To Build An Emergency Fund With Extra Savings
1. Sell on eBay. In my efforts to build my emergency fund of $1,000, I employed several tactics. One of the first things that I did was to sell items on eBay. I have been selling on eBay for over 9 years. For some reason though, I can always find more stuff to sell. This is one of the easiest and quickest ways to build your emergency fund. Simply go through your closets, garage, and junk rooms to find an excess of items that will yield extra cash. You really can sell anything on eBay. I have sold used clothing, an old radio out of my car, cds, books, and even kitchen items. I have also found that the items that I believe are least likely to sell are often the ones that sell very quickly. For more on this topic, check out our article on how to sell used items.
2. Work overtime. The second method I used to build my emergency fund was to work overtime. I know that this method is not always available to some people. However, just working an additional 1 to 4 hours every week can provide a substantial amount of money to go towards your fund. Be sure to check with your employer. They may not need the overtime consistently. However, you may be able to pick up some extra time temporarily while trying to build your fund.
3. Organize a yard sale. The third strategy I’ve used to raise money for my emergency fund was to have a yard sale. Often, there are items that you cannot sell and ship on eBay. Yard sales offer a great solution to getting rid of large items that are cluttering your home. In addition, you do not have to pay auction fees or taxes on the income that you earn from a yard sale. Plus, you are providing an economical way for people in your community to buy for less, while you recycle at the same time. For more on this, check out our post on yard sale deals.
4. Freelance. I also pick up extra cash by taking on extra side jobs and by freelancing, say at a site like Elance or oDesk. Elance offers a way for you to sell your skills to make extra cash. You can go on this site, create a profile, and offer your services as well as bid on jobs with potential employers. If you have a skill that you use in your current job or life, then it can be marketed on Elance. This approach alone has provided a substantial amount of extra income to put into my savings account.
If you can employ some or all of these tactics, you will build your emergency fund fairly quickly. The key to being successful with this fund is to only use it in the case of a TRUE emergency. Also, remember that any time you dip into your emergency fund, you’ll want to work to quickly replenish it before you go back to focusing your extra cash on your debt. This special account should always be funded for emergencies. Once you have saved enough in your emergency fund, you will feel a sense of security in knowing that if your car breaks down or some other crisis occurs, you’ll be able to afford having to address the problem.