Frugal & Focused: 29 Days Of Frugal Living: Day 21 - Simple Ways To Build An Emergency Fund

Long before my husband and I learned about budgeting we learned about the importance of having an emergency fund. Realizing that you can't always pay for an emergency with a credit card and not wanting to have to rely on others to bail us out, we started keeping some extra savings on hand "just in case".

We weren't particularly good at saving but we did keep enough to cover things like car repairs, medical bills and things like that. Eventually we'd read Dave Ramsey's Total Money Makeover and learn about budgeting, saving and building a real emergency fund.

Most financial advisers today recommend keeping at least 3-6 months worth of income in an emergency fund, 6 months or more being preferable. But that takes time and seems overwhelming when you don't have any savings.

Dave Ramsey suggests you start with a $1,000 emergency fund. That's a good place to start because it will cover the amount of most of life's more minor emergencies like an appliance or car repair. Then you can build on that.

Want to start building an emergency fund? Here are a few ideas to help you find some extra cash to put into an emergency fund.

Shop with coupons and save the difference. If you save $20 at the grocery store this week with coupons, move $20 into your emergency fund.

Sell your extra stuff. Go through your house and gather up all those clothes you don't wear, movies you don't watch, books you no longer read, toys your kids don't play with and sell them at a yard sale, consignment sale, or on eBay and Craigslist. Take the cash and put it in your emergency fund.

Give something up. Give up cable, drop your gym membership, skip coffee from your favorite coffee shop or lunch out and save the difference.

Declare a "no spend" week or month. Set a specific period of time and spend only what you absolutely have to during that time. Pay your bills and buy only the things that you need. Keep track of all those extras you would have spent money on and move that money into savings at the end of the "no spend" period.

Put your tax refund into savings. It's tempting to spend that refund but it's also a quick way to give your emergency fund a nice boost.

Save your spare change. Instead of paying with exact change, toss all your change into a container and change it out when it's full. It'll be a nice addition to your emergency fund and you'll never miss the money.

Having an emergency fund helps you address the inevitable financial setbacks we're all bound to face without unnecessary stress. And less stress makes life much more enjoyable.

Thanks for joining me for 29 Days of Frugal Living. Stop by tomorrow for another idea as we learn to make the most of what we've been given.

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