After 3 years of marriage, in January, Hubs and I finally reached our goal to save 3 months’ of expenses to our emergency fund! In 2019, we made some mindset shifts and took much more clear action than we ever had before, and we did it! This is how we learned how to build an emergency savings with little disposable income.
What We Were Doing Already to Build Emergency Savings
When searching for information online on how to build an emergency savings with little disposable income, I came across a ton of really great tips. The problem was, my husband and I were either already implementing those tips, or they didn’t fit well into our lives. So, we continued to struggle.
Start with $1,000 in Savings, Then Pay Down Credit Cards Before Completing 3 Months’ Savings
We were there! We had the $1,000 in savings, but while focusing on paying down credit cards, things kept coming up that caused us to tap into that $1,000. So, we were just spinning our wheels all the time, building up our $1,000 fund, depleting it, then building it back up again.
Clean House and Have a Garage Sale
Honestly, this one just didn’t work for us. We don’t live in an area conducive to garage sales, and my past experiences with selling things online never went that well. On top of that, my husband refuses to sell anything, ever. His theory is that if it’s good enough someone else wants to pay money for it, it may be useful to us someday.
Take a Part-Time Job on the Side
My husband works too many hours at his full-time job to have time for another job, and any hours I have available for a part-time job, I put into this website, which I hope someday will add to our income.
Skip the Morning Latte
Yeah . . . we’d been home-brewing our coffee our entire marriage. No extra money to be found there. (By the way, this french press is the best thing ever to happen to my morning coffee).
Pack Your Lunch
Check! Neither of us ever goes out to lunch.
Consider Moving to a Less Expensive Home
We were very intentional in the purchase of our house to ensure that my in-laws would have a space on our property. Since we have my mother-in-law to consider, this was also not an option for us..
Switch to Minimum Payments on Credit Cards
Eventually, we realized we couldn’t turn to the internet to help us find out how to build an emergency savings with little disposable income. We had to figure this one out for ourselves. We started by putting our full financial focus on building the emergency savings alone. We switched our credit card payments to minimum amount due each month, so every spare dollar could go straight to savings.
Direct “Extra” Money to Your Emergency Savings
In the past, we’d had a tendency to split any “extra” money that came in between savings and checking, so we could enjoy it a little, too. Extra money could be from overtime work,bonuses, third pay dates in a month, tax refunds, birthday gifts, or even cash found in a coat pocket. Since Hubs and I are both paid bi-weekly, we budget a typical month based on two pay dates, so those months that come along with a third pay date, we count as extra. When we started directing these various “extra” funds that were coming in all to savings, we saw much more rapid emergency fund growth.
Work More
I don’t have a lot of opportunities for overtime at my 9-5, so I began throwing my spare time into this website to see where it could take me. Meanwhile, Hubs started turning down a lot less overtime than he had in the past. We had to sacrifice some of our time together, and we were both very glad to know that this was a temporary situation while we built the emergency fund up.
Find More Ways to Cut Back on Spending
Finding more ways to cut back on spending proved to be the most difficult task for us. We re-financed our house, which reduced our very high mortgage payment a bit and freed up some monthly funds to direct to savings. But, the rest of our bills were already as low as we could get them. Neither of us had a daily latte habit, but all of my co-workers did and I would go with them occasionally on a break. I stopped even doing that. We usually get dinner out once a week for a night off from cooking. We stopped that too, and we began resisting impulse purchases. There wasn’t a lot of opportunity for us to cut back on spending, but we found the opportunities there were and figured every little bit counts.
How to Build an Emergency Savings with Little Disposable Income
With strong intention, anyone can save 3 months’ expenses to savings. There are a lot of tips out there that you’ll see over and over again as you search for advice on the topic of savings. Those are the tried and true. But, if you’re already doing those things and still struggling, or just looking for a way to make it happen faster, it may be time to try out my “next level” tips. You can do this!
Which tip will you implement first?
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