How to Save an Emergency Fund When Money is Tight

Last week Lee left the following comment:

This is a great topic! I’ve been trying to save up an emergency fund for a while now and not getting very far. My family’s income is variable, also, with my husband in the ministry and me at home with 3 children. Lynnae, I’ve really enjoyed reading your blog for several months now…can you tell me how you’ve managed to build up the emergency fund? It seems we are either behind on bills or else we have enough for groceries and not much else…where can I find the money for emergencies when there doesn’t seem to be any extra?

That’s a really good question, and I’d like to address that today. It seems that Lee and I are in similar life situations, as a one income family with a variable income. I figure there must be more people in the same situation out there, so this question is worth some thought.

Truth be told, the only reason our emergency fund was enough to sustain us this year is that my husband and I received a small inheritance when my father-in-law passed away last year. Initially, we were going to use that money to pay off most of our debt. As it worked out, we needed it for living expenses.

Still, I don’t think you need to have a financial windfall come your way to save an emergency fund. There are several things you can do to make an emergency fund a reality in your life.

Pay yourself first. I know you’ve all heard that one before, but I’ll say it again. Actually, in my life it’s more like “pay yourself second”. I told you before that my husband and I tithe first. Then we put some money into savings, even if just a little. I think it’s important to save at least a little income, so you get into the habit of savings. Even if it’s only $10 a month, eventually it adds up over time.

In addition, seeing your small savings grow can often serve as encouragement to try to save more. It’s easy to convince yourself not to save, when you have nothing in savings in the first place. Believe me, I’ve been there. But once your savings reaches $100, it motivates you to try to get to $200.

Use financial windfalls to build up your savings. Tax returns, inheritance money, unexpected gifts…..when you receive “extra” income, deposit it straight into savings. It’s tempting to want to blow the extra, but don’t do it. You will feel much better knowing you can afford to have the car repaired if it breaks down.

Snowflake toward your emergency fund. Do online surveys for a little extra cash. Sell a few things on eBay or Craigslist. Sell your books on Amazon or You could even pledge to only spend paper dollars. Put any change toward your emergency fund. There are lots of ways to “find” extra money.

Finally, don’t dilute your goals. What I mean is, don’t have too many goals at once. If you want to get out of debt, that’s a great goal. But if you don’t have a good emergency fund, put your debt repayment efforts on hold and focus on the emergency fund first. When you’re emergency fund reaches a satisfactory level for you, then focus all of your efforts toward debt repayment. You will find it easier to meet each goal if you focus on them one at a time, than if you try to accomplish both at once.

Do you have any other ideas for building up an emergency fund if you don’t have a lot of extra cash to spare? Please leave a comment and share your ideas!


By , on Dec 18, 2007
Lynnae McCoy I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.


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  1. I really liked that you mentioned some ideas like selling old books and putting that money straight into your emergency savings account. I’ve been working on my own for quite a while and you’re totally right about starting with a small goal and going from there. Great article!

  2. The first thing I do every other Thursday when I get home from work is check online to see how much I was paid. The second thing I do is hop on over to ING Direct and move 10% of my pay to my emergency fund savings account. Can I afford 10% out of every pay to put in savings rather than paying bills with it? Absolutely not. Even with that 10%, I still wouldn’t be able to pay my bills without adding to my debt a little bit every month. So, I figure, balls – I can’t pay my bills either way, so why not? The emergency fund is more important to me right now. $1000 was my goal, but I think I’m going to push that higher.

    • @jake – building an emergency fund by increasing your debt is not a great idea. 1. Clear debt 2. Emergency fund 3. Savings

      Emergency funds represent a different thing to each individual. However, if you have access to reasonably cheap borrowing at short notice, an emergency fund could simply be access to such debt…

  3. Lynnae:

    @Jake – I like that method! I may just use it myself!

  4. Lee:

    Thanks for the article, Lynnae! Such good advice…there are so many ways to find extra money in our daily lives. “There’s wealth in the fragments” as I heard someone say one time. Since you wrote on saving an emergency fund, I’ve managed to put away $50.00, which is no small amount in the holiday times, I think. Anyway, I know I’ve been behind on my reading here, and slow to comment, but I appreciate you staying consistent in your posts…you’ve been a beacon to this mom, and I’m sure you are to many. The Lord bless you.

  5. Lynnae:

    Aw, thanks, Lee! $50 is great for December! Good for you!

  6. Lynnae:

    I love the idea of taking loose change to the bank. I’m sure that adds up after a while!

    And automating savings is a good idea, too. You don’t miss what you don’t see.

    I think I’m going to have a garage sale next summer. One of my goals next year is to get rid of anything we don’t need or love anyway, so I may as well make a little money from my junk. :)

    And thanks for the thumbs up, Free Blog Reviews!

  7. NCN:

    When I was building up my mini-emergency fund, I would take all of the change in the house to the bank, every Friday! I used eBay to sell old baby clothes, books, DVDs, etc. We had a garage sale – and we sold everything that wasn’t nailed down! Building up an emergency fund requires sacrifice and dedication! Much luck to all who are working towards building up their funds and getting out of debt!!!

  8. Ryan S.:

    Building an emergency fund when money is tight is definitely a tough thing to do. I try to put every spare cent I have into it, even stopping at the bank on Saturday mornings and literally depositing spare change into it. Any rebates I get or money from other sources (like the day of jury duty I did) get deposited in there. If it comes right down to it, sometimes a credit card is the ultimate back up emergency fund–but I try to avoid that!

  9. Just start. There is some good advice from the people who commented before me. Just put aside the money FIRST. If you just consider it saved before hand, you will find that you will automatically adjust for it. We all have hidden expenses that you didn’t know was there. If you save first, it makes it easier to see it.

    Also, I very strongly agree with the “Just start” mentality. Even wrote a blog about it recently here

    When you see the small savings, you will want to keep building it.

  10. I’m going to second (and third and forth because others said the same thing in their comments) paying yourself first.

    Also, one thing we did to pump more money into our savings was to re-work our budget and start with the necessities (mortgage, food, utilities) and then add on the wants as extra money allowed. This helped us to see how much money really was left over after the needs were taken care of, and helped us to see how much money could be put into savings if we were willing to give up some things.

    Most importantly, the little amounts add up, don’t think you can’t stick an amount into savings because it’s too small – no amount is too small!

  11. MichelleH:

    Hi Everyone,
    This is all such good advice! Lynnae, I think paying yourself “second” is the best advice. God has promised he will provide for our needs if we’ll put Him first. After paying tithe, I think it’s best if you have an automatic draft straight into a savings acct. – even if it’s just a few dollars a month. If you don’t see it, usually you won’t spend it. We have a Citibank savings account that pays what most CD’s pay (somewhere around 5%) and it’s just set up to draft on the first of each month. I’m surprised how much it’s grown. We’re not there yet but just keep plugging along. My husband who is a pastor has a favorite saying “It’s not about perfection, but it IS about direction”.

  12. Rob in Madrid:

    I understand the one about not diluting your goals, that’s one I’ve been struggling with, were to put our emphasis, seems like you get pulled in 10 different ways financially. One emphasis Trent over at the simple dollar always makes is the need to find extra streams of income, not easy if you have 3 young kids at home but finding a way to earn extra cash is one way to get an emergency fund.

  13. Eden:

    I think Lynnae laid it out really well. I don’t have kids so I’m sure it’s much tougher to save the emergency fund when you have children to care for.

    That being said, saving $1,000 still seemed like a lot of money to save when I started. The key is to just start though. I started with $50 and added extra money as I could over a period of a couple of months. That was going too slowly for me so I also had a large Ebay sale. Once I had finished that up I had the full $1,000 and I’m so happy that I did it. I really think if you haven’t already cleaned out your house for junk to sell that is the best way to jump start your emergency fund.

    Also consider reducing retirement contributions or adjusting your tax withholding (temporarily) if you have any wiggle room there.

  14. Hi,

    I, too, am a stay at home mom with three kids. Saving with kids is really hard. Here’s what I do.

    I am following the pay yourself first idea. First, I have set up a small automatic deposit of $10.00 per month. Then, I am putting my debts “on hold”, for the first several months of 2008, paying minimums + $1.00 only. Then, for the next 6-9 months, I’m going to work on my Emergency Fund – no set amount, just what’s left over from money already allocated towards debt. I plan to have my debts completely paid off in about three years. I did the math and found that this method only adds about 1 month to my total payments. By the end of the 6-9 months, I will have saved almost $1000.00.

    We have two cars that are 10+ years old, as well as an 30 year old house. More debt would not be good for us. As it is, my oldest will be a teenager by the time our debt is paid off. Plus, this month alone cost us several hundred dollars on ER/doctor visits after ds broke his arm and I actually needed prescriptions to get well. I wish I had the fund now!

  15. Randall:

    Ditto with Plonkee. That worked GREAT for me too. If you don’t see it, and it continually goes into savings, it can build over time bigtime.

    Your basement can flood even if a small water line is left open for a long time. Flood your Savings Account the same way!

  16. I agree with plonkee that you should automatically omit some amount of money from your budget. Whether it is $5 a month, $20 a month or $100 a month, you likely will be able to adjust if it just isn’t there.

    We need to work on our emergency fund. I have heard that 3 months expenses is minimum and that you really need closer to 8 months….

  17. The only way that really worked for me was to put a reasonably amount into the budget and set it up so that it moved automatically on pay day. I’ve also tried giving up something for a week or a fortnight and putting that money into savings.

    In general though, once it’s there, I’m not inclined to touch it.

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