Stop buying lattes and smashed avocado, separate your needs and wants, get a side hustle! That’s the money advice we are fed. But the truth is, it’s not your morning coffee that’s keeping you out of the housing market or preventing you from building financial security.
As a nation, we’ve never earned as much, owned as much, or been so highly educated, and yet millennials struggle with money more than any previous generation. Why?
Because the world has changed, and you can’t win today’s money game playing by yesterday’s rules. But we can’t always rely on a gov’t cash bonus to boost our accounts, and with mass uncertainty and rising cost of living, taking control of your personal financial planning by getting started on your emergency stash just became even more important.
All genuine emergencies need money now and you don’t want to be forced to rely on debt or scrounging from friends or family. It can be a great psychological boost to get to that first $1000 quickly. So, if you are starting from scratch, try a sprint to $1000.
What can you do to build up your emergency fund?
Here are six ways to build your emergency stash fast.
Set up a direct transfer
Make building your emergency stash just like a monthly bill you have to pay. Arrange to have a set amount transferred from your day-to-day account to a special savings account each payday. You can even get your employer to make a separate payment direct from your pay.
Use lump sums
If you get a bonus at work, win some money or get a tax refund, transfer 90% of it to your savings account, straight away. The remaining 10% is your reward to spend how you like.
Get rid of all that stuff you no longer use that’s cluttering up your garage or storage cage. Try to sell it on eBay or Gumtree. Have some fun with friends and throw a joint garage sale.
Earn extra income
Visit platforms such as Airtasker or Freelancer for odd jobs to do for extra cash.
Use cashback rewards
Does your credit card have a rewards program that gives you cash back? Apply these payments to build your emergency stash. What about loyalty cards that give you every tenth coffee free? Put aside the money you save each time you redeem your loyalty bonus coffee.
Cut unnecessary costs
It’s amazing what you can cut out if it’s only for a short period while you get your emergency stash to the first $1000. Review your subscriptions on your bank statements and credit card bills. Could you do without Netflix for a few months, or your Audible subscription?
Just like a crash diet, remember you only have to follow these steps for a short period. A budget built on restriction isn’t sustainable, as it will most likely lead to blowouts and failure. As a quick sprint to your first $1000, however, it’s worth a good go.
Vince Scully is the founder of Life Sherpa and the author of Live the Life You Want With the Money You Have (April 2022), a practical handbook that shows Australians 8 simple steps to financial freedom, no matter how much money they have or how much debt they’re in.