If there’s one take-home message we’ve heard from all the financial experts on TV, it’s that we need to save for emergencies. And it’s probably a good thing we hear this repeatedly—according to new data from GOBankingRates, more than half of Americans have less than $1,000 in their savings accounts, and the majority of U.S. adults don't have enough cash to cover unexpected unemployment, an unplanned medical bill, or a major car repair.
If you're behind on your emergency savings, it's essential that you get a jump on the situation, as you never know when your next financial emergency could hit. While it depends on your circumstances, it's recommended that you have enough cash on hand to cover three to six months of living expenses. Don't know where to start bulking up your savings? Here are some easy tips to infuse your emergency savings with cash.
SAVE YOUR RAISE
Are you anticipating a raise in the next year? Before you get used to spending that extra money in your paycheck, figure out how much of a boost you got on a post-tax basis, and set up an automatic direct deposit that sends the excess funds directly into your emergency savings. The logic here is that if you didn't need the money just a couple of months ago, there’s no reason you can’t live without it. Automating the process helps keep you from spending that raise before you can save it, too.
RETHINK YOUR BUDGET
If you have a budget in place, you’re already far ahead of most other Americans. But just because you have a budget doesn’t always mean it’s working for your financial situation. If you want your savings to grow, you’ll need to look at your finances to see if there are any ways you can cut corners—whether that’s cord-cutting, cooking dinner at home more often instead of going out, or any other payment that could otherwise be used to bulk up your emergency fund.
GET A SIDE HUSTLE
Day jobs are draining, but if you're behind on savings, a temporary gig can boost your savings quickly. Freelance positions, driving a Lyft or an Uber and other gigs are a nice way to help you increase your emergency savings rapidly, and can always be just temporary.
POCKET YOUR TAX REFUND
Most American tax filers end up getting some refund. If the IRS owes you money, one of the smartest and easiest things you can do is to have that refund direct-deposited into your savings. No matter the amount, the extra funds will go a long way when you're coming in far behind.
Many of us are too busy to notice items around our homes that we don’t use, but if you’re sitting on multiple items you no longer use, it may be time to take inventory and invest some time into selling them. Listing an old TV or designer clothes can quickly help you earn some cash that not only cleans your house but enables you to be prepared in case of a financial emergency, too.