Monday, January 9, 2012

Little Ways To Pad Your Emergency Fund

An Emergency Fund is an essential part of a solid financial foundation. It is a cash cushion that you have accumulated over time. It should be easy to access, and to be used only for an emergency.

Some so-called experts will say that you should have 6 months worth of salary in your Emergency fund. Others say that having only $500 to $1000 set aside is a good start. You have to decide what amount is right for you and your family. I am rebuilding my Emergency Fund after having to use it this past fall. I’m starting small, with a goal of $500 by the end of February.

Here are some Microsavings tactics to help pad your Emergency Fund:

·       Automated transfer $25 from your paycheque. You have to start somewhere.

·       At the beginning or end of the week, transfer the last three digits of your bank balance over to your E-fund. (If your balance is $542.68, transfer the $2.68.)

·       Save your pocket change. 50 cents a day can add up over a couple of months.

·       Sell something and put the proceeds in your fund. Kijiji is my personal favourite to sell unwanted items.

·       Add government cheques like GST/HST or your income tax refund.

·       Add amounts equal to your ‘spending – savings’. If you buy groceries and reduce your out of pocket expense by using $7.50 worth of coupons, transfer that amount to your Emergency when you get home from the store. Same goes for your loyalty rewards points accounts.

·       Have a No Spend/Low Spend month to reduce your variable expenses and deposit the difference.

·       Round up your budget categories. If you spend $146.50 on cable/internet, budget $150. At month’s end, sweep remaining funds into your emergency fund account.

·       Replace one bad habit with a good one: If you smoke ( or whatever your vice is), smoke one less cigarette a day, and put $0.30 into your change jar. At month’s end, deposit into your E-fund.

·       Make something you can sell; sewing, knitting, woodworking, and card making are all viable types of side income for boosting your e-fund.

·       Do some babysitting, pet-sitting, house sitting, snow shovelling, attic cleaning or whatever to earn a little extra funds to pad your account.

·       Reduce your consumption of meat for a week or a month. Whatever you would have spent, add to your E-fund.

·       Skip a take-out meal or two (or a month). Save your money instead.

To have a fully funded emergency fund, you have to start somewhere. I am a firm believer that having an Emergency fund is part of a healthy financial plan. I won’t tell you how many months worth of expenses you should have, only that you should have an Emergency Fund. So should we.

Here’s to starting over, in a new year, with renewed hope, and renewed focus. 51 days to $500.


  1. These are great ideas!! Here's to $500 in 51 days!! :)!

  2. What terrific, easy ideas!

    We're not spending change, so that's a start :)


  3. Great & easy tips!! :) Good luck! Let us know how you do!!

  4. These are great, manageable ideas. Love it!

  5. Great little ideas! I love tiny efforts like this!

  6. Pst! Take a peek: