You need an emergency or rainy day fund to protect you against all of life's unpredictabilities. But saving up 3-months to 6-months of living expenses can be a difficult and tedious task, one that can be so discouraging that you give up altogether. To build up your rainy day fund correctly, you need to do it quickly. Read below for 3 time-tested ways of building up your rainy day fund quickly so you can move on to bigger and better things in your wealth-building.
3-month to 6-months of living expenses saved? - That's so much!
The typical 3-month to 6-month emergency fund is a decent chunk of change and it's not that easy to accumulate that much cash very quickly. You usually want to err on the side of caution and go for a bigger emergency fund (eg. 6-months of living expenses instead), but many people struggle with accumulating half a year of living expenses. Half a year of living expenses isn't the same as half of your income (it should be significantly less), but it's still a respectable amount and that amount can be difficult to accumulate when you have all of the other expenses gnawing at you (expenses like credit card payments, student loan payments, rent/mortgage, car payments, gas, and the basic necessities of lie). Life is expensive and it's understandable that so many people don't even manage to accumulate a reasonable rainy day fund.
It's hard...but you must do it
The fact that life is hard and that we have many expenses, however, is no excuse to not have a proper emergency fund in place. Life is random and unpredictable. You are doing yourself and your household a deep disservice by not having a proper emergency fund in place to shield you against the storms that will inevitably come your way.
Slow and Steady Doesn't Always Win the Race
Slow and steady saving might be good for long-term wealth building, but not for your emergency fund. For your emergency fund, you want to buckle down and use grit, discipline, and short-term self-denial to quickly build up your stash of cash so that you can move on to bigger and better things, secure in the knowledge that you have your emergency fund in place as insurance against all life's unpredictability. By quickly building up your emergency fund, you can channel your energy into a single purpose and you can quickly accomplish what will otherwise be a dreary and frustrating task (accumulating many months of living expenses by saving only a small percentage of your income).
Use the Following Strategies to Quickly Build Up Your Emergency Fund
1. Get a Temporary Second Job
Get a second job doing something on the side. Dave Ramsey's pizza delivery job has been the classic recommendation, but today many more options are available. You can drive for Uber or Lyft if your car meets the requirements. You can tutor if you have skills that are in demand. If you have the skills, it might be possible to do some freelance consulting. Even a weekend job as a cashier is a decent short-term gig if it helps you supercharge your emergency fund savings.
2. Sell Stuff
Selling stuff is a tried and true way of getting your hands on some cash quickly. Some people have more to sell than others, but if you have things that you aren't using anymore, try to put them on eBay or Craigslist.
3. Cut Down Big Time
Most households have some fluff-room (that's not a technical term). What I mean is that most households aren't just buying the basic necessities, but are instead buying extras luxuries. It might be possible to buckle down and cut out a lot of unnecessary (although pleasant) expenses for a short while. It obviously won't feel great while you're doing it, but it's not for long and once you have your emergency fund in place you can go back to a normal lifestyle secure in the knowledge that you have a cushion of cash in place against all of life's crazy unpredictabilities.
Pull Off the Bandage Quickly
Pull off the bandage of having to save up such a significant amount of money quickly. You can take your sweet time, but taking so much time will discourage you and taking a lot of time means you're not investing in the markets. Your emergency fund is not your wealth and its only function in your wealth-building is as insurance - insurance against the unpredictable that allows you to not have to touch your invested money. That's a key point to keep in mind. Don't waste time but instead build up your rainy day fund quickly using the tactics above. It may not be pleasant, but it will benefit both your pocket and your mind if done correctly.
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