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How to Rebuild Your Emergency Fund

Jul 29, 2023

Holy moly! Things are going amazing and you feel on top of the world. And then…. Boom!

Your car gets a flat tire, your dishwasher breaks, your tooth cracks…. And then you find yourself wondering – why now – why me?

Thankfully, you have an emergency fund. It feels great to pay cash to take care of the problem – but then your emergency fund is drained – and now what?

Woman holding a pink piggy bank by her head with title How to Rebuild emergency fund
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Now, it’s time for you to roll up your sleeves and keep moving forward – no matter how hard life slaps you – you get up and rebuild!

Unexpected expenses and challenging times can deplete even the most well-prepared emergency savings. 

If you find yourself in a situation where your emergency fund has dwindled or completely depleted, don’t worryyou can rebuild it

This comprehensive guide is specially designed for you, offering valuable ideas and practical tips to help you regain control of your finances and strengthen your emergency fund.

Here are tips and ideas to help you rebuild your emergency funds.

What Is Emergency Fund Used For?

Life can be full of surprises, and having a solid emergency fund is like having a superhero cape to protect your finances.

In unpredictable circumstances, an emergency fund is crucial for financial security and peace of mind. 

In simple terms, an emergency fund is a savings account, usually valued at 3 to 6 months of your household expenses that serves as a backup in case of emergencies.  

The money in the emergency fund should never be considered part of your regular monthly expense but instead should only be used for strict emergencies only.

How to Rebuild Your Emergency Fund

Don’t worry if your emergency savings have taken a hit;  you got this

In this easy-to-follow and detailed guide, we’ll walk you through practical steps to rebuild your emergency fund, and we promise you – it’ll be a breeze! 

So let’s dive in and take control of our financial future together!

Check Your Money Situation

First things first, let’s take a closer look at your finances. Sit down with a cup of your favorite beverage, gather your bills and statements, and let’s have a money date! 

Look at how much money is coming in each month and where it’s going out. Understand your spending habits, identify areas where you can cut back, and spot any unnecessary expenses. 

Also, check your bank statements to make sure you’re aware of all your debts. Understanding your financial picture will help us set up a plan that suits you best.

Create a Budget (Don’t Worry, It’s Fun!)

Now, if you don’t have a budget created already creating a budget might sound a bit intimidating, but trust the process, it’s like a financial game plan tailored just for you! 

Start by listing all your sources of income, including your salary, freelance earnings, or any other income streams. 

Next, list your regular bills, like rent/mortgage, utilities, insurance, and minimum debt payments. But don’t forget to make room for the fun stuff too! Set aside money for entertainment, dining out, and those little treats that make life enjoyable.

Once you have a clear view of your income and expenses, it’s time to allocate a portion of your savings to rebuild your emergency fund. 

Check out How to Build a Budget: Your Path to Financial Freedom.

Saving Comes First (You Deserve It!)

Let’s make your emergency fund your superhero mission! It’s time to give priority to rebuilding back that emergency fund. 

Saving might seem daunting, especially if you’re restarting, but every little bit counts!

If you can’t save a lot at first, don’t stress – start small, even if it’s just $10 or $20 per week. The key is to be consistent and make saving a non-negotiable part of your budget.

To make it easier, set up an automatic transfer directly to your savings account dedicated as your emergency fund.

Automating your savings ensures you won’t forget to save each month and makes it hassle-free!

Check out the 10 Benefits Of Automating Your Savings to Help You Build Wealth to give you a glimpse of how easy it is to set up your automated savings.

Find the Money Hiding in Plain Sight

Here comes the fun part – let’s find extra money hiding in plain sight! 

Take a closer look at your spending habits and see if there are any areas where you can cut back. 

Perhaps you can cook at home more often instead of eating out, brew your coffee instead of buying your next Starbucks®, or cancel unused subscriptions.

woman holding money with title rebuild your emergency fund

Consider shopping smartly by using coupons and taking advantage of sales. Many stores, supermarkets, and even online (Rakuten) have apps with discounts that can help you save while you shop.

By redirecting the money saved from these little changes into your emergency fund, you’ll see it grow faster than you think!

Make More Dough (Yes, You Can!)

If you want to supercharge your savings, think about boosting your income! 

Maybe it’s time to negotiate for that well-deserved raise at work or explore better-paying job opportunities. 

The additional income will give your emergency fund a fabulous makeover in no time!

You are a powerhouse, and your skills are worth something. 

Here are some ideas of what you can do to help boost the emergency fund:

1. Sell stuff

You’re probably surrounded by items in your house that you no longer use or need.  Check your closets, your garage, and even your kitchen for any items you can part with and sell to help you raise extra money for your emergency fund.  

You can sell these items at your local Facebook Marketplace, Craigslist, Poshmark, thredUP, etc. Also, don’t forget the good old-fashioned garage sale!

These newfound items can help you clear some of the clutter you may have, and create extra cash to help you rebuild your emergency fund.

2. Find a side hustle

A side hustle is usually a quick way to make extra cash.  

If you have a passion or talent, consider starting a side gig or freelancing to help you bring in some extra cash. 

You can even put your car to use with Uber and Lyft by driving people around.  Or you can do food delivery services like pizza delivery, DoorDash, Uber Eats, Grubhub, or Shipt.

Also, don’t forget to use your talent.  You may have a skill someone is looking for in your neighborhood – babysitting, tutoring for your favorite subject, pet sitting, dog walking, cutting lawn, or even crafting party decor.

There may also be someone looking for a good daily helper in your neighborhood as well.

3. Save on groceries by meal planning

Cutting down the expenses of eating out can help you save tremendously.

You can start meal planning and save hundreds on your grocery budget. 

Meal planning is when you are buying only what you need for the particular week to help cut costs.

It does take a little bit of work but when you meal plan this can help you save a lot on your grocery shopping.

4. Pause your investment

It’s okay to temporarily pause your investment – either through your employer or on your own. 

Although it may sound counterintuitive since this is investing for your future, it’s okay to pause investing to help you rebuild your emergency fund faster. After your goal has been reached you can always go back and reinvest.

5. Know it’s okay to say no

Knowing your power to say no is knowing discipline.

You may feel like you are missing out on a fun drink after work with your coworkers, but avoiding unnecessary spending and every little bit of money saved will help you rebuild your emergency fund faster.

Unless you have a separate sinking fund for that particular fun day – make sure you say no to going out because it’s not only “just going out to have fun” but also the extras that come with being out like food, gas, or other unexpected expenses.

All the no you will say to yourself now will help you rebuild your emergency fund faster but guarantee a yes for later.

Give Your Emergency Fund Its Own Home

It’s time to pamper your emergency fund with its very own savings account. 

Look for a high-yield savings account that offers competitive interest rates. These types of accounts can make your money grow faster, providing your emergency fund with the tender, love, and care it deserves!

Celebrate the Unexpected (Money, That Is!)

Life occasionally surprises us with unexpected money – like tax refunds, bonuses, or gifts. 

Instead of splurging all of it, think about giving some of that to your emergency fund. 

This way, you’re not only celebrating but also giving your future self a valuable gift – extra peace of mind!

High Five Your Progress!

Tracking your progress is like taking selfies with your savings – it’s fun and keeps you going! 

Set little goals, like reaching a specific savings milestone or saving a certain amount in a month, and celebrate when you achieve them. 

If you have a support system, share your achievements with them, and give yourself a high five – you deserve it!

Be Prepared for Curveballs

Life can still throw a few curveballs even as we rebuild. 

That’s why it’s a great idea to have a backup plan – it’s an emergency to your emergency. You’re not just rebuilding your emergency funds; you’re building resilience and preparedness to face anything that comes your way!

Final Thoughts

You’ve got this, my friend! 

Rebuilding your emergency fund is totally doable, and it’s an investment in your financial security and peace of mind. 

We hope this friendly and detailed guide has helped you feel confident and ready to take on and rebuild your emergency fund. 

Remember, you’re in control of your future, and having that superhero emergency fund will give you the confidence to tackle anything life throws at you. 

So let’s go out there, slay those money goals, and embrace the empowered, financially savvy human that we are!

Together, we’ll conquer the world – one savings goal at a time!

The Budget Academy
Fab Kellum author of the Girl, Get Out of Debt! blog

Hey you! Welcome to The Budget Academy. I am Fab, a mom, and an entrepreneur at heart. Like many, I have overcome financial struggles, and now I get to share with you how I became debt-free and what I learned on my own personal journey.  I have a Finance and Real Estate background and am passionate about helping others succeed and achieve financial freedom.  So, please don’t be shy, let’s connect and start this journey together! Learn more about me here.