4 Tips to Get An Emergency Fund Started

With a few adjustments, you can build a system that allows you to build savings without counting your dollars everyday.

1. Automate your emergency fund deposit. This is the best step you can do because it will take the money out before you miss it. I do this and it has helped me immensely
2. Start off with 5% of your gross pay to deposit. If you’re afraid that paying yourself hurts your ability to pay bills, then start small. I’d be surprised if you noticed 5% has caused a noticeable difference.
3. Put the money in a high interest earning savings account. Pick a reliable bank that FDIC insured. Here’s an article from Trent that highlights two top contenders: ING Direct and HSBC. There’s also Emigrant Direct and numerous others. The point is to put your savings to work. Most brick and mortar banks offer less than 1% even on their savings accounts and with some of these you’ll have 4% or higher returns.
4. Cut on some bills and put the savings into your emergency fund account. I know some of view this as an excessive penny pinching, but what I’m saying is look at the list and pick where you can cut back. You don’t have to do all of them, just the ones that can fit in your lifestyle.

Areas in Your Budget to Find some ‘Extra’ Cash

Sometimes you have to dig around and see if you can find some hidden cash. Just trying out a few of these tips can get some some cash to just get your emergency fund started.

• Look at your package deal for cable, phone, and Internet. Sometimes the deal they advertise on TV isn’t the best deal. Call your cable provider to see if they can give you a better rate. We had been able to ave some money by calling Time Warner Cable. It works sometimes, but if they don’t, consider cutting back on the cable package for a month or two, just to get your emergency fund started. You may not notice a big difference and keep the change. Either way you can save $30-50/month for this and that’ll help with your fund.
• Examine your cell phone plan. Can you change your plan? With Alltel you can change it without getting an extension on your contract. I’m sure about the other plans.
• Look at your land line plan. It didn’t make sense for my husband and I to have a land line AND our cell phone plans. So far, so good. If you must have a land line and a cell phone, you may want to take off long distance with your land line.
• Compare insurance companies for auto insurance rates. I saved $50 a month on car insurance for the same amount of coverage. Shopping does pay off. Just make sure you’re given a policy that can comfortably cover you and your situation.
• Go during happy hours when you decide to eat out. I know that many college students hang out as a part of the cultural, so it would be impractical to tell you stop going out, but at least save money while you’re there. There a great place down the street that offer 50% drinks and has 50 cent tacos. So we plan our eat outs around that time (4pm-7pm). It’s still just as fun, but a lot cheaper.

Embrace Frugality

These aren’t radical ideas that only the extremely frugal people can do. (By the way,‘ Frugality’ isn’t a bad word.) This is simple but effective ways to get you started on building a cushion. Bad things happen to good people, so prepare while you can. If you have anymore suggestions, please leave a comment.

Photo Credit: elle_rigby

• 5 Things to Do to Build Wealth in Your 20s Building wealth seems like an unattainable dream for some people. It is doable if you're willing to work and learn. Have goals you want to achieve and set a deadline. Spend less than you earn (and increase the gap). Automate your finances as much as you can. Eliminate your......
• Rich College Student: Emergency Fund 101 /caption] Everyone needs  an emergency fund whether you're in debt or not, whether you make a lot of money or not. College students are not exempt from it. Bad things happen and usually it is at the worst possible time. An emergency fund can give you some control over......

• Five hidden ways to find extra money - even when money is tight (This is a guest post from Kris Bickell. For more tips on getting out of debt and turning around your financial situation, visit www.debt-tips.com. You'll learn the actual debt elimination tips he used to get completely out of debt.) If only money grew on trees ... life would certainly be......
• Start Saving Money Today Here are five ways that you can begin to save money, beginning today. Americans are not saving enough money in this day and age to help ensure their stability financially. If you have enough money in your savings account, then it is going to be able to protect you from......