How to Save for An Emergency Fund: A 13-Tip Guide That Will Bring You Financial FreedomSaving Money
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No matter where you’re starting from — massive debt, making ends meet, starting to save or entirely focused on saving — there’s a few different ways to put aside the cash necessary for an emergency fund. Now, we’re not saying it’ll be magically easy or happen overnight.
However, these methods are a mix of small, medium, and large things everyone can do to save for an emergency fund. So, for all the people out there who don’t know how to save for an emergency fund, these tips, tricks, and life hacks are for you.
For best results, use them over longer periods of time, say 11 months, to see true savings which you can save for a rainy day or emergency fund.
Table of Contents
1. Get to Know Your Credit Standing
Healthy money habits start with knowing how much you have, are spending, and need to be saving for your emergency fund. Start of your 11-month savings plan by figuring out where your finances stand.
If you’re looking to put away money for out-of-the-blue events, then you absolutely need to know the ins and outs of your credit habits.
Credit Sesame is a free credit service that offers free credit reports, free credit monitoring, and even free identity theft insurance. The basic account offers a free TransUnion credit score and $50,000 in identity theft insurance for free.
You may think that these items are unnecessary, but as anyone with smart money habits will tell you, they are important predictors of where your money is going and will go in the future.
Credit Sesame also offers premium services, such as access to a bunch of other tools such as black-market website monitoring, Social Security Number monitoring and change of address monitoring.
Credit Sesame is very secure, considered safe by Norton, McAfee and ETrust. They’re also BBB accredited. Translation: they’re safe to use and know what they’re doing.
2. Improve Your Money Habits
Sometimes we all need help creating good money habits. This is especially true if you’re trying to save up extra funds for an unforeseen event or emergency.
This is for everyone wondering how to save for an emergency fund. Basically, you need to make smart financial decisions and save your money.
Luckily, there’s a smart financial decision motivator, an app changing the way people interact with their savings. The Long Game app helps to prepare people financially and also provides fun ways for people to turn savings into a game.
Once you download the Long Game app, you need to create an account and link your bank information. You can then fund the account for as little as $5. When you fund an account and set up recurring deposits, you earn free coins to play games.
This app is designed as an easy online savings account, meaning it can help you boost your retirement savings because that’s what it’s made for!
All the money you save is FDIC insured and held through Long Game’s partner bank, Blue Ridge Bank. On top of the money you already have, your account will earn 0.1% interest.
This app is designed for people who may need that little extra incentive to save, such as coins and games which could win you more money.
3. Switch to Cheaper Subscriptions and Insurance
Once you know your financial situation and have apps to help you save, the next step in our how to save for an emergency fund plan is to find cheaper ways of getting things you already use.
For instance, The Cushion app is a professional at saving you money. It can shop around for cheaper subscriptions, Comcast bills, and car insurance policies — all to save you money while still providing you with the same coverage and services you already have.
When you download the Cushion app, it analyzes your accounts to find recurring subscriptions and also compares prices on current bills, letting you know about cheaper options.
This is an instance where you shouldn’t be asking “how much should I save for an emergency fund?” but instead ask “how much can I save for an emergency fund?”
We recommend starting this earlier in the year so that you have more time to accumulate savings. Learn more about Cushion by reading our Cushion Personal Finance Bot Review.
4. Minimize Bank Account Fees
When you decide how much money to save for an emergency fund, you’re probably going to save that money in the bank, right? There’s a simple way to save money while banking which can then be put toward your emergency fund — minimize your bank fees.
That’s why apps like Cushion are so impressive and necessary. This is a simple app which gets your bank and credit card fees refunded.
The Cushion bot securely connects to the credit cards and bank accounts you most frequently use. Then, the bot — named Fee Fighter — will surface any bank fees that it finds and will request your permission to fight them on your behalf.
Within 24 hours, the bot haggles with your bank and sends you a refund.
Cushion keeps 25% of the refund, but because you’re getting 75% of the cash back that you didn’t even know you could get back, it’s a really sweet deal which you don’t have to work that hard to collect at all.
5. Get Cashback on Everyday Expenses
How to save for an emergency fund is simple, if you go slowly, over time. For instance, if you have about a year, start getting cashback on your everyday expenses and it will really add up!
This is a hack you can do throughout your entire life, really. There’s no reason not to and a ton of reasons why you should.
This is for everyone who likes shopping online. If so, this is an easy way to grow your savings and also pay off debt without changing your current shopping habits at all.
6. Earn Money for Online Shopping
Do you do a lot of online shopping? If so, then if you’re not using a money-saving app to do so, you’re essentially wasting money.
Sometimes when you think of how much to save for an emergency fund, you should start with smaller actions which you can reasonably sustain over time. Burning out at the beginning of your emergency fund savings journey is not good for anyone.
start with easy ways to get cashback while doing what you already do, such as online shopping. There’s no reason to not turn your current habits into a cash-making machine.
A great cashback app for online shoppers is Swagbucks, an app which has been around for a while. When you shop using the Swagbucks Search, powered by Yahoo!, you earn Swagbucks points with each search.
You can then redeem those points for gift cards from thousands of retailers — such as Amazon, Target or Walmart — or get PayPal cash. You’re getting paid to shop, which is the same as saving the money you’re spending.
7. Get Cashback and Use Coupons
For those planning how to save for an emergency fund, start getting cashback and using coupons. Coupons and cashback is not only something old crazy coupon ladies do!
You can make cash back which can then go into your emergency fund. Here, there are two main apps we’d like to mention, both with slightly different features — Ibotta and Rakuten (formerly Ebates).
One of the best freebie assistants for finding cashback deals is the Ibotta app, a free mobile coupon and cashback shopping app compatible with most iOS and Android devices.
When you sign up with Ibotta, you have the opportunity to earn cash back on select products by performing easy tasks, purchasing the product then providing proof of purchase like a receipt.
See our Ibotta Review 2023 for more helpful information.
Another of the greatest freebies around is the money saving app for shopping called Rakuten. It offers up to 40 percent cash back at over 2,500 stores.
Arguably one of the easiest ways to make money while shopping is by doing your online shopping through Rakuten at your favorite stores.
They offer a check or PayPal payments which are given to you every quarter. Join Rakuten now for free and start making money while you shop!
8. Make Money from Space You Aren’t Even Using
When you tally how much money to save for an emergency fund, factor in how much you could be making if you utilized all of the resources you already have. One such resource is space — either an extra room, floor or entire property.
While renting out your space is not for everyone, it is certainly a potentially lucrative way to make extra money, especially if you’re trying to save money for an emergency fund in under a year.
Everyone knows about Airbnb by now. But have you actually considered renting a room, floor or property that you’re not using?
This is a tip for those with good money management habits. You can make quite a significant amount of cash if you know how to spruce up a property and then list it for maximum reach.
To get started with Airbnb, all you need to do is sign up for free. Perhaps it’s a good idea to check your insurance policy if you’re renting a location to see if it is allowed or not first.
When everything is okay, then you can get busy taking amazing photos with lots of natural light and an airy, open feel. You also need to write an accurate description but using language which would draw a potential buyer in, despite how poky or far from public transport the place is.
For those willing to go the extra mile, renting an Airbnb property can provide some side hustle income flow or even main income salary if it takes off enough.
9. Lend Your Car for Some Side Hustle Income
Along that same vein, cars are also an asset which you may have and not even realize how much money you could be making from it.
Turo is a car rental app which allows people to rent out their own individual cars to other people, much like a car-rental service at the airport would.
Even if you drive to work, consider all the money you could save if you rented it out to others. It could be earning you money while you’re at work!
In fact, while you’re at working making money, your car would also be at work earning you money. It’d be double income for the price of one day’s work.
The entire point of saving up for an emergency expense fund is to make more money than you spend, so your savings can help increase. Renting out your car can really help with that.
10. Invest in Low-Risk Opportunities to Grow Your Savings
When you ask others for tips on how to save for an emergency fund, they may suggest investing. If you’ve never invested before, it can seem like such an unknown concept.
But, actually there are so many tutorials, apps, and ways to soak up basic investing knowledge that it is completely within the range of most people’s capacity.
A free app which can help you get started on your investing journey is Worthy Bonds. It lets you start small and then stack up savings over time.
For example, if you spent $9.50 at the grocery store, then $0.50 gets put into your Worthy Bonds investment account. It really can build up over time, so again, like many of the tips on this list, start this earlier and you will see results by the end of the year.
It’s an amazing way to start saving without thinking about it too much.
11. Invest in Things You Believe In to Grow Your Savings
Wealthsimple is another investment opportunity for people looking to increase their savings.
It has diverse portfolio choices, including socially responsible options that align with your beliefs, clear pricing of $0 minimum and fees, and unfettered access to certified financial planners for all clients, regardless of how much money you have.
In fact, Wealthsimple will manage your first $10,000 for free for one year when you sign up.
This app is best for socially responsible investors, beginning investors, tax-loss harvesting, automatic rebalancing, and access to financial planners.
Another specific benefit of Wealthsimple is that it offers a halal investing portfolio that complies with Islamic law. It contains about 50 individual stocks screened by third-party committee of Shariah scholars to make sure that no companies benefit from gambling, alcohol, firearms, tobacco or any other restricted industries.
Since Wealthsimple started business in the U.S. in 2017 (coming from being the largest Canadian robo-advisor firm), it has added a few more perks, including: a VIP Priority Pass membership, Smart Savings account, Roundup feature and free portfolio review.
12. Make Money in Unconventional Ways
This is definitely not going to be for everyone, but if you’re trying to save for an emergency fund and also happen to be motivated to get fitter, then this may be perfect for you.
A long-term way to earn money and improve your health is to sign up for HealthyWage, a site where people can get paid for losing weight!
It may sound like a scam, but it’s really true! If you set your goal, stick to it and lose the weight you’re planning to, the company will really pay you.
There have been glowing reviews of HealthyWage across the internet with people winning $2,400, $2,500 and even $3,180 for losing the weight they bet themselves they’d lose.
If you want to make extra money and want to be motivated to change your fitness, then the HealthyWage challenge may be the perfect fit for you.
It’s not a diet program or a weight-loss program. The person who signs up is in charge of everything from their diet to their exercise; the only thing that matters is your goal and if you meet it or not.
If you’re not sure if HealthyWage is right for you or not, then start at the HealthyWage Prize Calculator and go from there. You bet every month your challenge takes.
If you don’t meet your goal the money you bet gets put into HealthyWage’s pocket, for use with other betters. If you do meet the goal, then HealthyWage pays you more than what you bet as a prize.
13. Be Smart About Banking
The last bits of advice on how to save for an emergency fund have to do with how you should be banking during this entire 11-month savings journey. You need to set up a high-yield savings account and make “set it and forget it” transfers.
An excellent way to make more money every month is to put your finds in a high-yield account.
For example, did you know that most savings accounts at brick-and-mortar banks offer less than 0.10% interest rates? Meanwhile, in high-yield accounts, you could earn up to 20 times more!
If you have a bank account, routing number, and your Social Security number, you can usually open a savings account at a financial institution’s website in under 20 minutes. You can click their links to apply then enter your information.
Consider setting up the funding for the account by electronically transferring money. It doesn’t take any more effort to save money more one way than the other. The only difference is how much money you make and can put away for an emergency!
Going off of that, once you have a savings account which earns a good rate, then the next step is to set up an automatic payment plan to make regular deposits for you.
If you set up an automatic transfer each time, you don’t have to worry about consciously saving money for retirement It’s already being done for you automatically!
Also, since the transfer places the money from checking into savings, you can’t access it using a debit card, meaning you may be less tempted to spend that money, resulting in more savings for the emergency fund!
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.