The COVID-19 pandemic underscored the critical need for an emergency financial cushion. Most individuals live by the “that will never happen to me” mindset, until it does. The reality is, significant life-altering or life-threatening events can strike at any point, and it’s dangerous to pretend otherwise.
It’s alarming that many Americans have less than $1,000 in their savings accounts, barely enough to sustain them should they lose their jobs for several months. Financial experts recommend having 3-6 months’ worth of expenses in your emergency fund.
Why? Because unexpected life events can happen at any moment, and the need to finance yourself and your family doesn’t vanish with them.
Let’s discuss various strategies to promptly increase your emergency fund to achieve the 6-month target.
1. Auction Off a Luxury Item
Here’s a straightforward way: Sell off something! You could sell gold or diamond jewelry, an unused car, or even your phone if you no longer need it.
We usually become attached to our possessions, but they are just objects at the end of the day! You could live without numerous things, but not without income if you lose your job. It’s crucial to prioritize rightly.
Perhaps you possess a collection of vintage baseball cards that could fetch a fair amount. Or you inherited rare collectibles from your grandfather that could be sold for immediate cash. Or maybe you’d prefer a healthier emergency fund over the latest iPhone.
Scout your house; likely, there’s something you could sell. While many items depreciate with time, certain collectibles grow in value. Various second-hand selling apps can aid in this process.
2. Drop Detrimental Habits Like Smoking
Smoking and drinking are major obstacles to financial advancement. The cost of smoking itself is hefty, but the associated long-term health expenses and property damage can be even steeper.
Cigarette smoke wreaks havoc on the human body, surfaces, and upholstery. On average, each pack costs about $7, varying on your location. However, a heavy smoker buying 2-3 packs daily is blowing away considerable amounts of money that could be stashed in an emergency fund.
Cigarettes won’t finance your living expenses or job loss! Fortunately, alternatives and a supportive online community are available to help you quit smoking. With such resources, you can lead a smoke-free life swiftly.
Other practices like excessive drinking, drug use, or gambling also deserve consideration. They exert negative impacts beyond purely monetary ones.
3. Undertake a Quick Job or Project
Whether you possess specific skills or can carry out general tasks, there are likely speedy job opportunities in your area. Websites like Craigslist list “gigs” or short-term tasks that earn you extra cash.
These jobs can open doors to new possibilities by introducing you to different people and a chance to display your skills. Even if you just make a couple of hundred dollars from the entire venture, it’s still something you didn’t have before. And yes, that goes straight into your emergency fund!
It’s essential to remember that building an emergency fund is a gradual process. Unless you win the lottery or inherit a fortune – both unlikely scenarios – it can’t be accomplished overnight.
4. Take on a Second Job
While it may sound challenging, a second job doesn’t necessarily mean long hours at a factory or a fast-food joint. Jobs like Uber, DoorDash, GrubHub, and other ride-sharing/delivery services offer flexibility and the ability to set your pace.