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Everyday Cheapskate: How to Get $1,000 Into Your Emergency Fund Painlessly

Mary Hunt on

The most important thing you can do to make your personal economy strong is to have an umbrella -- an emergency fund with enough money in it to pay all your bills for six months. And it needs to be safe and secure in a bank account.

You read that right -- half a year's income! Wait. You can't imagine being able to save even 50 bucks? No worries. The secret to getting there is to start small. Like $50. Now it's time to figure out where and how to do this -- how to come up with this seed money to start growing your emergency fund.

10% OFF THE TOP

As you get paid, save 10% of your paycheck, right off the top before you do one other thing with that paycheck. Can't do it? I'm sure you can, but OK. Start with 5% or even 1% and build up from there. Make feeding your emergency fund the very first bill you pay, before anything else. It is a mandatory obligation to yourself.

Once you have accumulated $50, go to your bank or credit union and open a savings account. Or open a free savings account at my absolute favorite place to grow and maintain an emergency fund, SmartyPig.com, or at an online bank like Ally.

While you are opening that account, set up an automatic deposit authorization. This will give your bank authorization to automatically transfer the amount you designate -- $10, $100, or another amount -- from your checking account straight to your emergency fund on the exact day you specify.

 

Here's a secret: You won't miss what you don't see in the first place. Okay, you'll miss it for the first few paychecks, but soon you really will not miss it.

GET RID OF NONESSENTIALS

Give up the little things such as cable TV, eating out, gym memberships and that landline phone you have, but never use. That's a start; you'll know instinctively how to add to this list. Immediately redirect those monies to your emergency fund.

CUT VARIABLE EXPENSES

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