6 Simple and Creative Ways to Build Up Your Emergency Fund

6 Simple and Creative Ways to Build Up Your Emergency Fund

07/19/2021 | Savings & Budgeting


6 Simple and Creative Ways to Build Up Your Emergency Fund


We all know that life can be unpredictable — and when it comes to finances that it’s best to be prepared for the worst. But, of course, the challenging part of the financial-preparedness equation can be how to actually make it happen.

Enter the emergency fund — money we put away for unexpected emergencies that’s often referred to as a “rainy day fund.” It’s best kept in a savings account, and if we’re wise about it, we contribute to it as often as possible and touch it only when we have to.

But what’s the best way to build one? There are a number of effective tactics for accruing emergency savings, and the best approach for your own situation will likely depend on your personal preferences, your financial realities and your level of monetary self-discipline.

No matter what our situations, though, most of us can at least take baby steps toward building and growing an emergency fund. If you’re looking for ways to bulk up your own emergency fund, consider these six creative tactics for putting money away for a rainy day:

1. Automatic transfers

This tactic is a great way to get into the habit of saving, and over time the “missing” money will become less and less noticeable. The idea is to set aside a certain amount of money from each paycheck — choosing a set amount that you can comfortably spare — and put it straight into savings on or around payday. One nearly effortless way to do this is to set up an automatic transfer from your checking account to your savings account, and schedule it to recur each time you get paid.

2. Keep the change

While this tactic may not build a big emergency fund quickly, it’ll definitely add up over time — and as they say, slow and steady often wins the race. When you get spare change after making a cash purchase, or even $1 and $5 bills after breaking a larger bill, drop it into an empty jelly jar or coffee can at home. When the jar or can fills up, take the funds to your bank and deposit them into your savings account.

3. Put away windfalls

We all come across unexpected or otherwise extra money on occasion, whether it’s thousands of dollars in a tax return or $20 from Aunt Jean in a birthday card. And while it might be tempting to hit the town, do some splurge spending or take a vacation with the windfall, try to at least put a sizable portion — or even all — of the money away in your emergency fund. This can be a quick way to make big gains in your savings balance.

4. Add in the extra

When you have extra money left in your checking account at the end of a pay period, consider putting some or all of the surplus into your emergency fund. After all, you’ll have the benefit of a full paycheck’s worth of new funds in your checking account, so you will be able to spare some money for savings.

5. Trim the fat

Most of us can find room for cutbacks in our budgets, whether it means dining out a little less often, going without that second or third video-streaming service, carpooling to work or even brewing our own coffee instead of buying a daily cup at the coffeehouse. Even cutting out small expenses can add up over time — and when we put the resulting funds into our emergency fund, it can help us build a bigger safety net of funds available to us when the unexpected strikes.

6. Let your money work for you

When you put your emergency funds into a high-yield savings account or a money market account, it will begin to grow on its own, even without you making additional deposits. And, of course, as more and more time passes (and interest accrues), you’ll begin to see compound interest — meaning you’ll be earning “interest on the interest” from your savings. It’s a great way to maximize the return on your savings and to build a bigger emergency fund.


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