In tough economic times, it is essential to have at least a small amount of money stashed away to use in case of missing work due to sickness, being laid off, or any unexpected expense that may arise. Sadly, many people do not have any type of savings to fall back on in the case of emergency. According to OwnTheDollar, an online personal finance blog, at least 50% of Americans have less than one month’s expenses in a savings account in case of an emergency. The opinions concerning the exact amount of emergency fund that a person needs vary from one expert to another. In his book, The Total Money Makeover, Dave Ramsey lays out some of the baby steps for becoming debt free. His first baby step is to stash away $1000 for an emergency fund. Only after achieving that step does he recommend beginning to pay off the debts with the snowball method. Ideally, he, along with others, say that the average person needs between three and six months savings built up as an emergency fund. The ideal amount for each person will vary depending on your marital status, money needed to live on monthly, etc. But I want to focus more on ways to build up a savings account.
1. Save Coins
Growing up, I remember having a small metal bank that my parents had given me. I would get any spare change that I could find and put it in that bank. It was a good feeling to get the bank filled up and then sit down and roll the coins and take them to the bank. Although coins alone will not build up a huge savings account, it will definitely add up quicker than you think. Start by looking around your house for coins. Check under the couch cushions, on the floor, everywhere! When you’re out running errands, take a second to look down in the parking lot. There is always spare change there that has been dropped. The thing that I like to do the most is to use cash for my everyday expenses instead of a debit or credit card. At the end of the day, I will put all of the change accumulated throughout the day into a jar that I have at home. You would be surprised how much you can accumulate in a month’s time. There are some months that I end up with around $30-40 in spare change alone.
2. Collect Aluminum Cans or Scrap Metal
Collecting aluminum cans and other recyclables is becoming quite popular again. People who wouldn’t normally bother with the small amount of money that you receive for recycling these things are gladly holding onto them for awhile and then taking them to a recycling facility to cash in. For the average person, the amount of money will not be extravagant in the least bit, but it will set you on course to build up that savings quicker than you are by doing nothing. Ask friends and family members to save their cans or plastic bottles for you. Go for a walk and take a small bag with you and pick cans or bottles up along the way. If you have access to people in authority at schools, ask them if you can come in after a sporting event to pick up the cans and bottles. There are two places in my small town where you can turn in aluminum cans and get up $0.65/pound. By recycling cans and bottles, you can come away with a good chunk of change and you’re cleaning the areas up too.
3. Freelance/Temporary Work
There is a growing demand for part-time workers and freelancers in many different fields. These types of opportunities are great for individuals who may already have a successful career, but just need to earn some extra money. It is also a great way to build an emergency fund quickly. In order to find freelance work, put up a flier at your local grocery store advertising for some services that you could offer along with your contact information. Post an ad on Craigslist. While you’re on there, check out some of the listings that have already been posted. There are many short-term opportunities for many fields added to the website on a daily basis. There are several websites that specialize in acting as a forum to connect freelancers with people/companies needing work done. These can be either short-term or long-term and cover just about any field you can think of.
4. Set Aside Money Each Week
This is essential. It is not likely that any of these things will build a massive emergency savings fund quickly. You must be determined to set aside an amount of money each week in order to build your emergency fund. It doesn’t have to be $50 or $100; it can be as little as $5 on a weekly basis. Whatever works for you is fine; the most important thing is that you are setting aside something each week. Once you get in the habit of setting aside some money each week, it gets easier and you can try to set aside a little more each week until you build a very healthy savings account.
Finally, when you reach the amount of money in your emergency savings fund that you feel comfortable with, set it aside in an interest bearing account that is easily accessible, but don’t touch it! Let it sit in that account and earn interest forever, until you have an emergency that requires you to withdraw some of it. And, by emergency, I do not mean that there is a new video game, new computer, clothing, or newer car that has come out that you feel you must have. An emergency is something that affects your livelihood. You are laid off work, you lose a loved one, you or someone else in your family gets sick, etc. There is a sense of security in having at least something set aside in order to get you through a tough time in your life and you will be thankful that it is there when you need it!