When moving into your first apartment and getting started with adult life, one of the most important things to do is to start building up an emergency fund. It can be difficult to do that while paying other expenses, especially first-apartment rent, so read on below for four tips and tricks to start putting aside emergency fund money while living in your first apartment.
Set a goal
While it may not seem important at first, setting a savings goal is a crucial step in building up an emergency fund. Without a goal, it can be difficult to see the benefits of your progress and hard to know whether you’re saving enough. A good rule of thumb is to start with three to six months’ worth of your income.
Make a budget and look at the biggest items
The first step in saving money is obviously making a budget, but what should you do once you have one? It’s easy to look at your current spending and feel like there’s no way you can cut back on any of your expenses, but here’s a tip for finding a place to save money.
Look at the biggest items on your budget, not the small ones. Many personal finance gurus preach never eating out and skipping lattes, but the items in your budget where you can save the most money are the large recurring expenses. Take a look at your car payment, cell phone bill, and other large expenses, and consider cutting back to add more money to your emergency fund.
Keep a spare change and cash jar
In a time where nearly everything related to finances can be handled with a card or even your cell phone, the value of physical cash or change often goes unnoticed. It can be easy to let cash you receive slip out of the bounds of your budget, so implement a spare change and cash jar and put money in it every time you get cash.
Whether you find spare change on the ground, earn tips at work, or get some extra birthday money from a family member, putting it in a jar for savings can help you spend it wisely and add some money to your emergency fund instead of considering it all to be spending money.
Use a bank account or credit card bonus to get started
When saving up for an emergency fund, it can be helpful to have some money to get started. One easy way to get a head start is to use a bank account or credit card sign-on bonus. Many banks will give you a bonus when you open an account and deposit a certain amount of money.
Credit card sign-on bonuses are a great way to get quick cash, but be careful with how you use them. Many cards will give you a reward of up to a few hundred dollars when you spend a certain amount within a few months of getting the card. Don’t use this as a reason to spend more money – simply put your normal expenses on the card to claim the bonus without having to increase your spending.
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