How To Quickly Save A $1000 Emergency Fund

There's an old saying, "when life gives you lemons, make lemonade." In other words, make the best of what life throws at you. Let's be honest...life is hard. Life is full of difficult decisions, rough roads, and unforeseen circumstances. We also know all those things as emergencies. Something that stands out to me about "when life gives you lemons" is the word "when." Lemons will come...and when they do, you have a choice to get hit by them or catch them and make some lemonade.

Unfortunately, even though we know emergencies will come, very few of us will be ready for them. According to MoneyWatch, 66% of Americans cannot cover a $1000 emergency if one arises. Even scarier, 63% cannot cover an emergency worth $500. Only 37% of Americans can cover an emergency of $500. That is shocking. People have admitted that if a $500+ emergency would arise, they would have to either borrow money or put it on a credit card. That's just a different way of saying...more debt!

Remember, life will give us lemons, so we might as well be ready for them when they come. I know this sounds backwards, but the first step in getting out of debt is to not pay extra towards your debt, but to save money. I'm not saying don't pay your debts. I would never recommend that. You should never stop paying at least the minimum payments on all your debts. However, before adding money to your debt payment, you should save a $1000 emergency fund. Once that is in place, then begin paying extra on your debts.

I know what you're thinking, "How can I save $1000 if I'm living paycheck to paycheck?" "How can I save $1000 while I'm drowning in debt?" I know that's what you're thinking because I thought the same thing. Every month at the end of the month, I was lucky to have a few dollars left. We would squeeze every penny we could from our account, just waiting for payday. But, when Brooke and I decided to change our financial situation, we knew things had to change. Yes, $1000 seemed like a daunting task, so we rolled up our sleeves and found some ways to quickly get that money so we could start knocking out our debt.

Brooke and I did several things to try and save some money or make extra money so we could try and start saving our $1000. Here are some ways that we, and others, have quickly saved a $1000:

1. Have a garage sale - do you have a house full of junk? Well, one man's trash is another man's treasure. Even if you only make $200 at a garage sale, it's $200 more dollars in your savings account than you had before. And...you now have a clean house.

2. Turn a hobby into a business - My wife is the best cook and baker I have ever met (I'm not just saying that because she's my wife...I truly believe it). Brooke decided to turn her hobby into a fun way to make some extra money. She opened a little in-home bakery so she could make a little extra money all while staying home with our boys. This wasn't actually done for our emergency fund, but it allows us to free up some budget space.

3. Make extra money - Deliver pizzas. Drive for Uber or Lyft. Serve tables at a local restaurant. Mow lawns. If you have lemons, make lemonade (haha). There are hundreds of little side jobs that don't take a lot of time, but can make a huge impact on your emergency fund.

4. Make a visual reminder - I heard of a family that made a "thermometer chart" and hung it up on their refrigerator. For every $100 saved, they would color in the next section on the thermometer until it reached the very top where their goal was $1000. This not only made the saving fun, but it gave them a goal and kept them focused.

There are literally hundreds of ways you could jumpstart your savings, but these are just a few. Be creative. Have fun. Do something different than you're used to doing. After all, your old habits got you into your mess...so do something different to get you out.

Once you have your $1000 emergency fund in place, remember... it's for emergencies only!!! It's not for a down payment on a car. It's not to go out to eat. It's not for groceries. It's for emergencies. Hopefully this $1000 will never have to be used. Hopefully it will stay in your savings account completely untouched. For Brooke and I, we only had to use it once. We had an emergency car repair. It was the first time a major car repair didn't result in a credit card payment. We paid cash. The next month, we simply replenished what we spent and our emergency fund was at full strength again.

The best thing that happened once we saved our emergency fund was how fast our confidence grew. We were never able to save $1000 and keep it long term. Sure, we had saved money before, but there was always a reason to spend it. We saved our first $1000 within our first month and a half. If we could save $1000, now what could we do? It gave us the confidence to know we could tackle our debt. However, it also gave us reassurance. If something ever came up, we knew we would be okay. Knowing that we had a plan gave us a huge boost in our financial journey.

Life will give you lemons, so be ready for them. Don't wonder what hit you when an emergency pops up. If you need help and coaching along the way, contact me and we will work together. Life's lemons don't have to hurt, let's all start making some lemonade.

Kevin