A hefty emergency fund could stand between you and financial disaster if something goes wrong. With the COVID-19 pandemic and the uncertainty it brought over the past year, the importance of having emergency savings has become more clear than ever.
If you aren't satisfied with the size of your rainy day fund, you may want to quickly increase the amount you have set aside.
While saving a lot of money on a tight timeline can be difficult, you have a few options to bulk up your emergency savings account so you'll be protected against life's surprise disasters. Here are three of those options.
Before you get started, take a look at our guide on how to calculate your emergency fund. Here you'll learn about all the items to consider, as well as some options on the best places to keep your money.
Bringing in extra income can be a fast way to save up an emergency fund.
There's no real limit on how much extra work you can do and how much you can earn (except, of course, that there are only so many hours in a day). And if you're able to live on your current budget and don't need your side gig money to pay bills, you can put all of your extra earnings into your emergency savings.
Many employers are very eager to hire right now -- and remote jobs and gig work have become increasingly common. It may be possible to find a side gig that you can do from the comfort of home, or one that comes with flexible hours that you can easily fit into your schedule.
If you opt for a side job, you'll be shocked at how fast the money you're earning can bulk up your emergency account if you deposit the entire amount into savings.
Several cash back credit cards offer the chance to earn money as a reward. This could come in the form of a statement credit or a direct deposit into a bank account of your choosing.
There are also many credit cards that provide you with a cash bonus -- such as $250 or $500 -- if you become a new cardmember and fulfill certain minimum spending requirements within a short period of time (often three months).
If you can earn a sign-up bonus and rewards for your everyday spending, you can deposit this money right into your emergency account. Some card issuers allow you to get a check for your cash back or to have the money deposited into your account directly. But even if you get your bonus as a statement credit, you can still save that money you'd otherwise have to send to your creditors and use it to bulk up your savings.
Finally, if you have unwanted items in your home, consider selling them and depositing the money directly into savings.
If you look around your place, you may be surprised how much you can find to sell because you no longer use some of your items. Instead of cluttering up your house, you can turn these unused possessions into an emergency fund that provides more financial security.
Using one or all of these approaches could leave you with a hefty emergency fund in no time, so start trying them out today.
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