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YOUR ACTION PLAN: Start Your Emergency Fund (5:00 mins)

One of the biggest concerns for anyone making the jump to post-college life is how to save money.

This can be tough if you’re already trying to pay off student loans, but with these three simple rules, you can save up your emergency fund fast.

But you don’t have to panic – I’m here to help. In this post, I’m going to share three simple rules for quickly building up your emergency fund.

So read on and get started!

  • Open your savings account

My favorite account is the Ally Bank account because it has a high-interest rate, it’s a great bank, and has buckets (which allows you to save your money towards different goals).

To start with, you can pick any savings account or bank you like using.

Pro Tip: If you want to know what to look for in a bank to open your savings account with, then there’s an article for that 😉

  • Deposit $1

Yep, that’s it.

A million dollars starts one dollar at a time, so that’s all you need to do.

Deposit just $1. Of course, you can deposit more if you like. But the most important thing, in the beginning, is creating the habit of saving in an emergency fund, not how much you put in.

  • Automate, Automate, Automate

The fastest way to skyrocket your emergency fund is to do it without thinking about it.

Set up direct deposits to your savings accounts (my favorite method because you never see the money come out and are never tempted to spend it) or set up recurring transfers from your checking account into your savings account.

  • Lower Expenses, Level Up Your Savings

Plan your spending, look for areas to save a little more, and then set aside any money that you don’t need.
For example, if you have a monthly budget of $500 for groceries, but you only spend $450, you can put the extra $50 into your emergency fund. Or if you cut a subscription and have some more free funds then boost your savings.
Over time, this can help you to build up a cushion of cash that can be used in case of an emergency.

  • Have A Plan For Windfalls

My dad always says that the best way to ensure good use of a windfall is to plan for it BEFORE you get it.

Now, he was talking about winning mega millions in the lottery, but it still applies to tax returns, bonuses, refunds, and the like.

If you have a plan for what to do with extra money, you can start saving for an emergency fund quickly and easily.
One way to do this is to set aside a percentage of any windfall for your emergency fund. For example, if you receive a $100 bonus from work, you could immediately transfer $10 to your savings account.
Or, if you come into some money unexpectedly – birthday money, tax return, graduation gift etc, you could commit to saving half of it.

Having a plan for how to use unexpected money can help you build up your emergency fund quickly and efficiently, giving you peace of mind in case of an unexpected expense.

  • Bonus: Use An App to Help You

Even if you have a good income, it can be tough to resist the temptation to spend when you see all of the things you could buy. But what if there was a way to save without feeling like you’re depriving yourself?

That’s where savings apps come in.

By automatically transferring a set amount of money into your savings account each week, you can slowly but surely build up your emergency fund without even thinking about it. And because the money is out of sight and out of mind, you’re less likely to be tempted to dip into it for non-emergency expenses.

So if you’re looking for a painless way to start saving, consider using apps like Digit and Qapital are designed to help find money in your budget and help you save more even if you think you’ve saved as much as you can and there’s nothing let.