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The emergency fund challenge is a great way to save money for your emergency fund.
If you don’t have money set aside for unexpected expenses, then you are making a big mistake. No one can get through life without something unforeseeable happening. Life will throw you a curveball; it is just a matter of when.
Ultimately, you want your emergency fund in place in less than 60 days. Want to save yours in 30 days? That is awesome money goal! Unable to save enough money in 60 days and need more time, that is absolutely okay!
The first $1000 of your emergency fund needs to be saved in a shorter amount of time, whenever possible.
That is your first money goal!
Then, you are prepared if and when you need access to that money.
This emergency fund challenge is developed to help you reach your goal sooner rather than later.
Everyone likes a challenge! It helps them to stay on top of what they want and accomplish the task in a short period of time.
Keep focused on fully funding your emergency.
That is your only money priority in the foreseeable future.
Stay cognizant on the reason for an emergency fund – to help you at an unforeseeable time in the future.
If you are stuck in a pinch and need to pay something, then you truly know the need for an emergency fund.
Let’s dig into this challenge.
Why an Emergency Fund Challenge?
An emergency is likely to arise. It is a matter of when.
The best money management tip you can do is to be fully prepared for an unexpected circumstance to arise.
Simply put, you must save money today. Don’t put off saving for one more day.
You need to fund your emergency fund as soon as possible. Right now, it is your #1 priority with your finances (outside of paying your current necessary bills).
That means you need to save money fast. Possibly, even find ways to make money fast.
Do you know the proper amount needed for your emergency fund? If not, then learn everything about emergency funds.
$1000 Emergency Fund Challenge
For some, $1000 emergency fund might be sufficient.
For others, you may need a higher amount set aside in your emergency fund.
We are going to show you exactly how you are going to find the money to fund your emergency fund. This isn’t complicated. Very basic math is needed and we will give you examples to help out.
Regardless of the amount you need, figure out how to save money for your emergency fund.
How much to save by paycheck:
When you have no extra money sitting around or things to sell, the first way to figure out how to save money is by your paycheck. Here are the steps how to figure out saving by paycheck:
- Decide how quickly you can save your emergency fund.
- Figure out how many times you will be paid during your goal timeframe.
- Divide your emergency fund amount by the number of paychecks from above.
- When you get paid, immediately put that emergency fund amount from each paycheck into a separate online savings account.
- Figure out how to live on the rest.
Example – Saving by Paycheck
Let’s say each paycheck you net $2000 and your goal is to save your $1000 emergency fund in 60 days.
- Goal is to save emergency fund in 60 days.
- You will get 4 paychecks in the next 60 days.
- You need to save $250 per paycheck. $1000 divided by 4 = $250
- Immediately transfer $250 on pay day into a separate online savings account.
- Figure out how to live on the remaining $1750.
Save Your Emergency Fund as Quickly as Possible
For others, their only priority is to save their emergency fund as fast as they can. In that case, here is how you would do it.
- Figure out your bare bones budget. The amount you barely need to survive. We have free printables in our resosurce library to help you.
- Take your net paycheck and subtract your bare bones budget. That is the amount you can save per paycheck.
- Figure how many paychecks it will take to fully fund your emergency fund. Take your emergency fund amount and divide by the amount you can save. That will show you how many paychecks it will take.
- On payday, transfer your amount immediately to a separate online savings account.
Example – Save Emergency Fund as Fast
For this example, you are paid weekly with a net paycheck of $1600. You need to save $1700 for your emergency fund.
- Your bare bones budget is $4250 per month. You downloaded the free budget printable to help you.
- Your net paycheck is $1600 each week. Your net monthly checks are $6,400. When you take away your bare bones budget, you can save $2150 in the first month, which is more than your emergency fund amount. You plan to save $500 per paycheck.
- It will take you 3 paychecks to almost fully fund your emergency. On the fourth paycheck, you will put $200 towards your emergency fund.
- On payday, transfer your amount immediately to a separate online savings account.
The best part of the emergency fund challenge you realize how well you do with money saving challenges and want to continue saving more money.
Money Saving Challenges:
- Handpick the 52 Week Money Saving Challenge for You
- These Monthly Money Saving Challenges You Need to Try
- Ultimate Guide to a Successful No Spend Challenge
Simple Tips to Find Money for the Emergency Fund Challenge
Here are the best possible ways to find extra money for the emergency fund challenge.
1. Make a Plan for Your Money
Simply stated, that means you need to create a budget, which in essence means to figure out where you plan to spend all of your incoming income.
A budget is the best financial move you can do.
Sit down and figure out the amount needed to cover your bare necessities and bills. Then, use the rest of the money for the emergency fund challenge.
- How to Make a Budget in 7 Simple Steps
- 110+ Personal Budget Categories for a Fail-Proof Budget
- Full List of Budgeting Apps on the Market
- How to Make Living on a Budget Painless
2. No Spend Challenge
There is no better way to save money than to stop spending money.
A no spend challenge is the perfect idea to quickstart your money saving journey. Over a dedicated amount of time, you consciously make the decision to not spend money.
Personally, one of the reasons I love no spend challenges, they help you determine what matters in your life. When we did our first no spend challenge, I quickly realized we were spending money on this that truly didn’t mean anything to us. Going forward, we adjusted our spending to what we wanted to spend money. Then, saving money for the things we couldn’t afford before.
What would happen if you did a no spend challenge? How fast could you save money for the emergency fund challenge?
3. Begin to Live More Frugally
A frugal lifestyle doesn’t mean you are cheap. You can take the frugal vs cheap test here.
In means, that you are willing to stretch your money further. Then, you have the opportunity to do what you want with your money and life.
Living a frugal lifestyle isn’t hard or difficult. It means you are wanting to save money.
Especially if you are choosing to live on a bare bones budget while you fund your emergency fund, then you must figure out how to drastically cut expenses. Hopefully, you realize that living a more frugal life actually opens up more doors to saving money. Stick around… we have plenty of resources to help you.
Frugal Living Resources:
- Being Frugal with Money – A Millionaire’s Case Study
- The Ultimate Guide to a Frugal Lifestyle
- 175+ Simple and Easy Frugal Living Tips to Save Money
- 10 Simple Tips on How to be Frugal with Food
4. Make More Money Fast
If you are barely making more income than your expenses and saving your emergency fund will take longer than 90 days, then you must figure out how to make more money fast. There isn’t just many other options.
You want to make money while you are able to pick up a second job. This normally starts as a short term option to help you make sure you have enough money saved in case of an emergency or unknown expenses rises.
The best part is there are plenty of ways to make money fast.
You just need to put your creative hat on. That way you can reach your first money goal.
In the future, figure out how to incorporate more types of income into your bank account.
Making Money Resources:
- 20 Genius Ways on How to Make Money Fast
- Best Gig Economy Jobs – 8 Quick, Easy Ways to Make Extra Cash
- What to Do with Old Stuff (& Make Money)
- Best Cash Back Apps for Groceries – Make Money Instantly
5. Lifestyle Changes
Lastly, the best way to improve your personal finances over a longer period of time is to make lifestyle changes. Some can be drastic and others can be subtle. The choice is yours.
Personally, we have found that incorporating lifestyle changes was the simplest way to fund our desires, which for us is to travel. While making extra money is nice, it was quicker to change how we lived on a day-to-day basis and cut expenses. This past year, we took it one step further and got rid of over half our personal belongings and learned to live with less stuff.
If you find yourself struggling and living paycheck to paycheck, then you desire a better life.
One that is free from stress and worry about paying your next bills.
So, don’t worry about other people think. Do what is best for you and start to cut expenses.
Ways to Cut Your Spending:
- Avoid the Trap of Lifestyle Creep and Reach Financial Freedom
- 76 Easy Thrifty Tips & Tricks to Live a More Frugal Lifestyle
- Our Journey to Own Less Stuff After 6 Weeks Without Our Things
- 10 Money Management Tips in Crisis Times to Help You Stay Afloat
Saving Beyond a $1000 Emergency Fund Challenge
In all honesty, $1000 emergency fund may not cut it. The right size emergency fund may be higher than a $1000.
In that case, you need to continue your saving journey to fully max out your emergency fund.
Make sure you understand all of the variables to consider beforehand. In this post, we detail out everything you need to know about emergency funds.
You may have to save beyond the common size of $1000 emergency fund.
Just remember… anything beyond $5000 for emergencies expenses is considered a rainy day fund. Both are necessary, but happen along different points along your journey towards financial freedom.
Emergency Fund Tracker Printable
Who doesn’t love free printables?!?!
This is a simple way to track your progress and keep you motivated.
Ready for your Emergency Fund Challenge?
Do you have the motivation you need?
Unfortunately, none of us have a crystal ball, so we don’t know when we will actually need to use your emergency fund. When it happens, it will catch you off guard.
So, don’t delay!
Get started and start saving money for your emergency fund. We have outlined how to figure out where you can start saving money. Plus plenty of tips to help you get started on your emergency fund challenge!
Don’t stop there… Consider one of our money saving challenges: