How To Save $1,000 For An Emergency Fund

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Everyone has unexpected expenses come up once in a while, yet 61% of Americans aren't equipped to cover a $1000 emergency. Because of this, it makes sense to save $1000 for an emergency fund fast.

There are many ways to save money in a hurry, and in this article, we'll go over simple ways to build a basic emergency fund so that you're prepared. $1000 is a great start to cover many of life's curveballs, so let's jump right in.

What Is An Emergency Fund?

An emergency fund is a place you store money if you have an unexpected expense or lose your income due to sickness or job loss and need to cover the bills. Many emergency funds are stored in a high-yield savings account or a money market account, as this money is easily accessed when needed, but still separate from your checking account so not to touch it when it's not.

How Much Should I Save In An Emergency Fund?

Financial experts generally agree that you should have three to six months' worth of living expenses saved up in your emergency fund. That said, at the bare minimum, having $1000 saved in your bank account can be helpful for most minor mishaps. You'll also want to determine what your spending habits are like and what types of irregular expenses you have. If you have some months where you spend a lot more than others, it may make sense to have more than six months saved up.

Why Do I Need An Emergency Fund?

Having an emergency fund helps create financial security and peace of mind. In addition, it helps prevent you from going into credit card debt when you incur unplanned expenses.

Even with $1000 saved in an emergency fund, you can cover unexpected expenses such as:

• Car repair
• A trip to the emergency room
• Washer/Dryer replacement
• Refrigerator replacement
• The deductible for your homeowner's insurance or basic home repairs

Because we never know when a mishap will strike, having money in an emergency fund simply makes good financial sense.

Where Should I Keep My Emergency Fund?

Storing your emergency savings in an online savings account makes sense as it's easily accessible and has a higher interest rate than a traditional brick-and-mortar bank. CIT Bank is a bank to consider putting your emergency fund.

CIT Bank offers high-yield savings, money market, CDs, and custodial accounts designed to help you maximize your personal finances.

View your rates here.

Of course, you can use any bank you want. The first step to starting an emergency fund is opening a separate bank account than your checking account. Keeping your savings separate from your checking account is key as you'll be less likely to spend it.

How To Save $1000 For An Emergency Fund Fast

$1000 may seem like a lot of money when you have nothing saved, but by employing the below methods, you should be able to save up your first thousand in 90 days or less. Of course, everyone's financial situation is different, and some may be able to save $1000 much faster than others.

Here are 7 great ways that you can save $1000 for your emergency fund fast

Set a Savings Goal

A great way to save money is first to set a savings goal that tells you how much you want to save, how you will do it, and how much time you anticipate it will take to save the money. In this case, you're looking to save $1000. To reach $1000, it may make sense to break down your savings goals into a monthly savings amount or a weekly savings amount.

The next 6 steps will help you more clearly define your savings goal.

Cut Back On Spending

The easiest way to save money for your rainy day fund is to spend less of it. If you're an impulsive buyer or simply spend a lot of money on things you don't actually need, then first and foremost, cut back as much discretionary spending as you can. Small changes in your spending habits can go a long way.

The more successful you are at cutting back on spending money where you don't need to, the more money you'll have saved for unexpected expenses. Not overspending has an additional effect of giving you more money to pay off debt faster and saving up for big purchases like a home or a child's future college tuition.

Create a Budget to Identify Where You Can Save

Having a budget and tracking your spending is almost always a good idea and having one is an easy way to identify where you can cut back in your day-to-day spending. When creating a budget, break up your expenses into what's a need and what's a want. Once you determined your wants vs. your needs, figure out if there are any wants that you can spend less money on, even if temporarily while you save up your first $1000 for your emergency fund.

When trying to save money fast, all extra cash counts, and that includes the $5 coffee you're buying every day. In fact, if you happen to pay $5 for coffee 7 days a week, you'd save $450 of your $1000 in 90 days just by skipping the coffee.

Even after you've cut back on your wants, you may not have enough money saved in the timeframe you wish, so the next few methods will talk about that.

Use An App To Help You Save Money

Several apps exist to help you save money in a variety of ways. These apps are often free though some may have a one-time cost.

Swagbucks, Honey, and Ibotta, are cashback apps that promote savings when you make everyday purchases.

• Swagbucks is an online rewards platform where you can, in part, earn money for shopping online, scanning your receipts, filling out surveys, and playing games on your phone. If you're already shopping, then why not save a little with each transaction at supported retailers.
• Honey is a browser extension that finds coupon codes at most major websites. Not only can you find coupon codes to save money, but Honey will also give you Honey Gold when you shop with the extension. For every 1000 Honey Gold that you collect, you'll be able to redeem $10.
• Ibotta allows you to scan receipts and save on specific items at hundreds of retailers. Before you go shopping or to the grocery store, check out Ibotta's daily deals to see if there's anything you can save money on.

Trim is a paid app that helps you save money in a different way. Instead of giving you cashback, Trim automatically negotiates certain bills with your service providers. By doing this, Trim can lower your monthly bills for you. The app also attempts to identify subscriptions that you're paying for and may no longer be using. Canceling unused subscriptions is a great way to save money each month.

Pay Yourself First

Paying yourself first means saving money before you pay other expenses. To get started with this, set up an automatic transfer from your checking account to your emergency fund or other savings account whenever you get paid. This can be any amount of money, as long as you're saving before you're spending money on anything else.

A good reason for doing this is that you force yourself to save money right away, instead of saving money based on what you don't spend at the end of a given month or pay period. This works well if you have a weekly savings goal as well. For example, say you want to save $1000 for your emergency fund in 90 days, or 12 weeks. That's approximately $83.34 per week that you'll need to save. Therefore, set up an automated transfer of $83.34 for each week until you reach your goal.

Increase Your Earnings

You can only save so much money, and if you have a low income, it may be challenging to reach your $1000 emergency fund savings goal as fast as you'd like. Taking on a second job or a side hustle can be just the thing to reach your $1000 savings goal quickly.

Here are some ideas for something you can do for 90 days or less to earn $1000.

• Drive for DoorDash: DoorDash drivers earn tips for delivering food from restaurants to customers at their homes.
• Tutor on Chegg: Tutor others on Chegg and earn $20 an hour or more, depending on your subject area of expertise.
• Do yardwork for neighbors and family: Mow lawns, rake leaves, and shovel snow to earn quick cash.
• Drive for Lyft or Uber: With Lyft and Uber, you'll drive people to their destination and earn money plus tips for doing so.
• Petsit on Rover: Rover hooks up pet owners with petsitters. Get paid to take care of animals to earn extra money.

Sell Stuff You No Longer Need

Having a yard sale and selling belongings that you don't need can be a quick way to raise up to $1000. Some towns have flea markets where residents can rent a table and bring their belongings to sell. You can also use sites like eBay to sell your unneeded belongings.

Every little bit counts when you're saving emergency money to cover a mishap or your monthly expenses if you lose your income.

Wrapping It Up

Saving money is important, as having an emergency savings account is critical to cover unexpected expenses and help avoid credit card debt. In this article, we discussed what an emergency fund is, why they're important, and how to save $1000 fast for an emergency fund.

Taking baby steps to save money not only protects you from unplanned expenses but also promotes having more money in the future for other things such as getting out of debt, making a major purchase, or investing for your retirement.

What do you do to save for emergencies?