June 28, 2017
One of your very first steps on your journey for financial freedom is building up a $1,000 emergency fund. Baby Step #1 as Dave calls it.
Many people want to skip this step and simply begin throwing money at their debt as quickly as possible; however, this step is crucial because for many of us - the reason we're even in debt is because we didn't have enough liquid cash to cover an emergency when it happened.
Having a fund in place will make the inevitable "when it rains it pours" moments seem much more like mere inconveniences, rather than emergencies.
Here are 4 ways to build your $1,000 emergency fund up quickly:
1. Sell Some Stuff
You may remember back in the day when I started this financial peace journey, that I kick-started my emergency fund by selling some things on (what was then) Facebook yard sales. (You remember...it was the same time I told you that someone was trying to sell Ed Hardy hair gel on there, too. ((What?)) But in case you're new here...you can read the story here.)
I was really skeptical of doing something like a FB yard sale at the time, but now it is completely the norm to sell your random things online. Thankfully, though, things have gotten much more sophisticated.
Facebook apparently caught on that creating groups to sell items was becoming popular so they created Facebook Marketplace. This is a much easier avenue to sell items than what it looked like back in the day, when you posted your item, and it just went on a normal Facebook feed, and the more items other people posted the further down the feed your item went, and you'd have to scroll scroll scroll to find your item and type the word "bump" in the comments to get it back up to the top of the feed so it wouldn't disappear down a feed rabbit hole forever (I'm exhausted just thinking about it). No, no, no more of that on Facebook Marketplace. Now you simply take a picture of what you're selling, post it, price it, and someone will send you a message if they're interested.
A couple of other new online marketplaces to hit the scene (besides the classic eBay and Craigslist of course) are LetGo and Nextdoor Neighborhood. Same concepts here as Facebook Marketplace and they both have their own apps. Easy peasy.
A note: I found that clothing doesn't do especially well on sites like this, but never fear - I've got some clothing-selling suggestions below!
(Disclaimer the world is scary sometimes: always meet in a public place when meeting a stranger to sell an item. If it's a piece of furniture that they have to come pick up, be sure other people are around. Also - only take cash. People be crazy.)
2. Sell Some Clothing
There are a plethora of options available to us when it comes to selling clothing now. Obviously there are the old standbys like consignment shops, Plato's Closet, and Buffalo Exchange, but there are also some newer and more appealing options out there as well.
I've had a good bit of luck with Poshmark - a user-friendly app that allows you to take pictures of your clothing and quickly upload them to the app. Buyers and browsers can either accept the price you've listed it as or bargain with you. Once someone makes an offer and you accept, Poshmark will email you a pre-paid shipping label (hell yea). All you have to do is box up your item, print your label, and drop it off at your nearby UPS/FedEx store. The buyer has 3 days to decide whether or not they want to keep it and then the money is deposited into your Poshmark account, which can then be easily transferred into your bank account.
Another new option to hit the streets recently is thredUP. thredUP is perfect if you have a big closet purge ahead, and no time to take a gazillion pictures of all your things to upload onto an app. Just go to thredUP's website and request a Clean Out Kit. They'll send you a huge bag (with a pre-paid label on it for when you're ready to ship it back to them) that you can stuff with as many clothing items as possible. Send that sucker back to them and the fine folks at thredUP will go through your things and list them on their website at consignment prices (it's a great place to shop for inexpensive clothing items as well!). What they do not accept they will recycle and utilize elsewhere. You may not get paid for every piece of clothing you send to them, but they will recycle it for you which means (bye Felicia) it's out of your hair. As your items sell, money will be deposited into your thredUP account, which can be easily transferred to your bank account.
By far some of the most lucrative gigs out there are any that you have to "sit" something. Babysitting is how I've built my emergency fund, paid off a lot of my debt, and saved up for some of the extra things I wanted that my income couldn't support. Dogsitting and housesitting are equally as lucrative. Get your name out there, and tell your friends, colleagues, and social networks that you're availble for these gigs. People will come take you up on it - I promise.
4. Get a Side Gig
This doesn't have to be a permanent fixture in your life, but picking up a little side hustle is a great way to bring in more income when you're trying to build up your savings (or pay off debt). The question is not what talents and hobbies do you have, but rather which ones can you get paid for?
My side gig as a group exercise instructor has been a huge factor in my financial freedom journey. Plus - I get paid to workout. Who doesn't love that? I get paid $25/class and always have the opportunity to pick up more classes other than my regularly scheduled ones if I can.
I have a friend that really loves wine, so he picked up a side gig as a wine distributor through one of our local liquor stores. He works special events and hands out samples of wine and gets to tell people all about how delicious it is.
Or - maybe you love creating things like jewelry or art - start an Etsy shop! There are plenty of avenues to get paid for doing things that you love. (And if all else fails - pick up a part time job somewhere. It won't be forever!)
5. Create a GoFundMe Page
Lololol - just kidding. Just wanted to see if you were paying attention. GoFundMe pages and crowdfunding sites are wonderful and appropriate for many situations. Building up your $1,000 emergency fund is likely not one of those situations.
These are just a few ways to help you build your emergency fund fast. You'll actually be pleasantly surprised with how quickly you can save up $1,000 when you put your mind to it and get a little creative. Now tighten up your boot straps and get to work!