3 Tips to Build Your Emergency Fund When You’re Broke

It’s not easy, but you can do it! Here are three tips to build your emergency fund – even when you’re broke.

This was last year, and change has been hard on all of us.

But you know what’s true even more than ever now? Money doesn’t care how hard life is. 

Our finances don’t improve unless we intentionally work to improve them, and this is especially true in a crisis where there’s a very real possibility of civil unrest leading to financial instability.

I’ve talked a lot before about being completely broke, and working hard to get out of that hole, and build a life. In fact, today, I’m even committed to living off of last month’s money. But I’ll admit that over the past few months, I’ve had a few panicky moments when I looked at my bank accounts.

And you know a big lesson I’ve learned? The importance of an emergency fund.

Two weeks ago, I had an emergency dentist visit, which of course led to more dentist visits that, you guessed it, weren’t covered by any insurance.

It gets expensive fast, and boy was I glad for that emergency fund!

If you’ve never had an emergency fund, let me tell you, it brings a lot of peace of mind.

You may be thinking, “Why not charge an emergency on your credit card if you need to? That’s what it’s for, after all.” But with that comes the possibility of declined cards, and the reality of paying off what you owe with exorbitant interest.

Having cash in hand means no interest, extra money in your pocket, and a guarantee that you can make the payment when you need to. This is a massive part of how to budget when you’re self-employed, too. 

So, whether you’ve never had an emergency fund, like so many of us, or you’ve depleted yours recently, here are three tips to get started building it back up.

3 Tips to build your emergency Fund When You’re Broke

• Start with your small change. Any dime, dollar, or five-dollar bill you have, put it in a jar marked “emergency fund, to be deposited into the actual account later. These little bits add up, and once you’ve committed to putting them away instead of spending them, you might be surprised at just how little they affect your day-to-day living.
• Next, commit a weekly sum. Would you be devastated by losing $20 a week of your spending money? How about $30? $40? Before you think you don’t have that much to spare, take a moment to be serious with yourself. Ask yourself what you’d have to cut back if you didn’t have it. A restaurant meal? Convenience food? Nail salon? Could you look for shoes at Goodwill instead of Target? How about doing some extreme frugal living and hanging your clothes out on a line to save electricity? And then problem-solve how you can get by without whatever that thing is – using your crockpot instead of takeout, doing your own nails (or giving them a break), etc.
• Declutter your stuff with Facebook Marketplace. Or whatever secondhand website works best for you, there are simple ways to turn your junk into cash. Most of us slowly accumulate stuff, and some of that stuff we eventually stop using. Now’s a great time to review it and find ways to make a few bucks.

These three tips may not seem like a magic solution to you – and they’re not! But do you see a theme?

It’s problem-solving. It’s your brain getting rid of the “I can’t, I don’t have enough money” mentality and instead saying “how can I make this work?”. That’s really going to be the biggest key in rebuilding your emergency fund.

Learn to stop focusing on the unfairness of life and how other people, or entire generations, have had it better, and start looking for ways to problem-solve. 

Look, I know it’s not easy. I know it can be discouraging to work so hard, but only make progress at a snail’s pace – if that. But keep going because you will succeed. The momentum will build. And you will get there.