Emergency Fund: Just Starting Out

Tips and advice to build your savings muscle.

Without an emergency fund, life’s occasional pickle can turn into a major problem. Say you have a $400 car repair bill and put it on your credit card. You are $37 further in the hole, assuming it takes nine months to pay off and your credit card’s annual percentage rate is 21.99%.

If you opt for a payday loan, you add $60 or even more if you can’t pay it off within the first 14-day cycle.

How do you fix this?

NerdWallet explores ways to save when you’re living paycheck to paycheck:

  • Find out where your money is going. Review your current spending patterns by sorting through your statements or downloading a free budgeting app.
  • Set specific short-term and long-term goals. For example, you might try to save $84 per month so you’ll have $1,000 after one year.
  • Rethink your bills and your budget. The right adjustments can free up $50 or more per month to go toward savings.

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creditscoregaugeBuilding an emergency fund is one aspect of your financial health. Knowing your credit score is another. As a registered member, you can get a free analysis of your credit score and personalized steps for your finances.

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Trick yourself into saving

Sticking cash into savings won’t help if it comes right back out again. Here are some ways to trick yourself into saving:
1. Automate it
2. Hide it
3. Name it

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Get your hands on extra cash now

It takes time, discipline and extra money to build up a financial safety net. Meanwhile, we’ve rounded up 19 ideas for earning fast cash today, increasing your income on an ongoing basis and cutting your monthly spending.

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Stock an emergency pantry

Saving money is important, but you can acquire food much faster. An edible emergency fund can help you make it through a natural disaster as well as help you save money — if done correctly.

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Take steps to pay off debt

Most Americans have debt, and it’s not a bad thing when it gets you where you need to go. But it’s a problem if you can’t reasonably pay your expenses, save for the future or sock enough away for an emergency.

Here’s an eight-step plan of attack:

1. Stop digging
2. Save something before you pay anything
3. Get a handle on what you owe
4. Prioritize your debts
5. Assess your resources
6. Decide whether you can succeed
7. Put your plan into action
8. Plan for life after debt

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NerdWallet staffers took an unbiased look at savings accounts to round up those with consumer-friendly features and optimal interest rates. When you’re looking to stash your cash in case of emergency, find the account that suits you best.