5 Ways to Build an Emergency Fund with Very Little Money

Building an emergency fund doesn’t have to feel like a wishful thought. Nor does trying to save your money have to feel hopeless.

As a child, my parents stressed the importance of saving money. They would always say, “There will be rainy days ahead, be prepared and save your pennies.” And they were right, pennies do add up over time.

For some reason, we think that we need to have a ridiculously huge amount in the bank before we can do anything (start a family, buy a home, go to college – the list can go on forever). This doesn’t have to be the case.

My husband and I have been married for nearly 7 years, 3 children later, and he’s going to law school very soon. It’s safe to say that money has never been abundant for our little family but we have what we need. Even with very little we have managed to help build our family’s emergency fund by doing 5 simple things.

5 Ways to Build an Emergency Fund with Very Little Money:

1. Create a Separate Account

The best thing my husband and I did was create a separate savings account for our emergency fund. When we had a dollar or so to spare we would transfer the money so we wouldn’t be tempted to spend it.

We also knew no money would be withdrawn from our savings account without the other person knowing. Having this money set aside, although still growing, has been a significant game changer to encourage us to set goals and save.

2. Money Saving Apps

Take advantage of money saving apps such as Ibotta and the Walmart app. Take the time to scan your receipts into these programs and allow that money to add up over time. After you transfer your earned money from these apps, place it promptly into your emergency fund.

3. Grocery Allowance

What is your weekly grocery budget? Can you do with $1 less? $5 less? Focus on saving money where you still have control over in your finances. Plan ahead and shop using the store’s ads by preparing meals with what’s on sale to help make your money stretch further. Somedays you might have $0.78 left over, and that’s okay. Pay yourself that amount and place it into your emergency fund.

4. Spare Change

My children love finding pennies on the sidewalk during our family walks. They have their own piggy bank where they put the coins they find. The pennies quickly became dollars and the amount was placed in their separate savings accounts, their own emergency funds. A penny might not seem like much, but even $100 maintains its high value on a single penny.

5. Pay Yourself

Take advantage of the times when you receive gift cards from family members or friends (usually around the holiday season). Use the gift card in place of your grocery allowance and put your usual allowance from checking into your emergency fund. Use these opportunities to pay yourself.

As you study your finances on how to best create an emergency fund for you and your family, you will feel better prepared for your future.  Take the time to open a separate savings account for your emergency fund, use money saving apps, plan ahead and save money where you can control, take advantage of spare change, and pay yourself when gifted gift cards.

The small and simple financial steps you take today will make a huge difference for tomorrow. Then you’ll be well on your way to building up your own emergency fund even when you feel like you have very little money.

A huge thank you to Micah Klug of Home Faith Family for this guest post!

Micah Klug, author of “50 Freezer Meals: Easy Dinners for the Busy Family” runs a lifestyle blog to help people strengthen their home, faith, and family by living simply without losing quality or sanity.