Smart Ways to Build Your Emergency Fund

Wealth Planning

January 11, 2021

4:20 min

Concerned man looking at computer screen

Many factors can impact your financial well-being, even if you’re an avid money-saver. Check out these tips to financially prepare for the unexpected.

Many factors can impact your financial well-being, even if you’re an avid money-saver. Factors outside of your control can contribute to financial hardships, and can result in living paycheck to paycheck. Events like a pandemic, illness or injury, job loss or divorce can cause financial distress, especially if your savings isn’t where you need it to be. Whether you have a safety net, live paycheck to paycheck, or are thinking about your long and short-term goals, consider these ways to build your emergency fund.

Preparing for a financial emergency

Financial emergencies can come out of nowhere, making it important to prepare as much as possible. The likelihood of unexpected financial hardships should impact how you handle money.[1] Experts recommend having three to six months’ worth of living expenses saved. These funds will help cover housing costs, food, transportation, childcare and health care. A little planning can go a long way, making unforeseen expenses much easier to handle.

Establish a budget

By having a full picture of your finances, you can evaluate your income and expenses. Having an understanding of where your money is going will help you build a bigger savings cushion. Determine where you’re spending money, and how you might trim any expenses. Even making small cuts to your spending can add up quickly.

Set up an automatic savings plan

What’s better than watching your savings grow? Not having to remember to add money! Put your savings on autopilot by setting up an automatic deposit to your savings account.[2] Consider setting up a second direct deposit with your employer to move a portion of your paycheck into a savings account, or add an automatic transfer from your checking to your savings account. With an automatic transfer, you won’t neglect adding money to your emergency fund, and will also help control any extra spending. If the money is already moved to your savings account, you’re less likely to spend it.

Save your tax refund

Ramp up your emergency savings account by adding your tax refund! It’s tempting to want to spend that money, but consider putting the majority away for a rainy day. Depending on the amount of your return, that’s an easy way to quickly grow your emergency fund.

Save your spare change

Even saving a little bit of money will add up – spare change included. While it might seem frivolous to save every penny or nickel, it’s one of the easiest ways to save. Get a jar and start collecting any sort of change, dollars or coins. Let it become a habit, and soon you won’t even realize you’re doing it. At the end of the month or year, you might be surprised by how much you saved!

Sell things you no longer use

Look around your home; are you using everything you see? Is there anything you don’t regularly use that you could convert into cash? Whether it’s old kids’ toys, exercise equipment, clothes or household items, think about the last time you used the item.[3] Think about it this way: would you rather have the space in your home and money from selling, or the item? Selling items you no longer need is an easy way to clean out your house, and add cash to your emergency fund.

Get a second job

Consider picking up a side job to earn extra money for your emergency fund. While the thought of spending more time working maybe isn’t appealing, working just four weeks can make a huge difference.[3] It’s always beneficial to continue expanding your skill set, and it can only make you more valuable to employers. Also, think about your hobbies and how you could turn that into profit. Whether you enjoy activities like writing, web design, or tutoring, you can explore different freelance websites like or If you’re into crafting, there are opportunities to sell your creations online at Be sure to consider any costs before starting your side job, and evaluate how much of a return you’ll earn.

Believe in yourself

You can do this! It might seem a little overwhelming trying to use these tactics, but the important part is to believe that you can do this. Have you heard the phrase “the power of positive thinking”? Start small with one of two of these tips, and you might realize it’s easier than you thought.

With these strategies, you’ll be well on your way to growing your emergency fund! Even starting small is a step toward meeting your savings goals. As always, we’re here to help you with your financial journey. Contact us if there’s any way we can help you.


[1] Tips for Financially Preparing for Unexpected Events, The Balance

[2] 7 Smart Ways to Build Your Emergency Fund, Kiplinger

[3] 4 Quick Ways to Build Your Emergency Fund, Dave Ramsey

The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its subsidiaries and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.

Category: Wealth Planning

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