Earlier this year, I completed a no spend challenge for the month of March and it was life changing. Before I get into how I did that, let me give you a little back story about my financial behavior. In the past, I NEVER saved money unless it was to purchase something in particular like furniture I wanted or for a shopping spree at the thrift store. Typically those were short-term saving goals otherwise known as sinking funds. At the time, I didn't even know that what I was doing, had financial terms for it. Fast forward to this year, imagine me of all people, saving small sums of money here and there to create my first $1,000 in my emergency fund, in just under two months......it's possible trust me!
The following is an overview of how I budget my income (post tax) and exactly how I was able to save my first $1,000 .... Q-U-I-C-K-L-Y :
Participate in a No Spend Challenge: I'm not even sure where I found the concept of doing the no spend challenge. I can tell you that it was probably on a YouTube channel that I came across or while scrolling on Instagram one day. Regardless, I'm glad that I found it!!!!! The no spend challenge that I joined basically meant that you couldn't spend money on anything that wasn't in your budget for essentials. So I didn't purchase any books, clothes, shoes, skin care products, dining out........NOTHING EXTRA for 30 days. Every time I was tempted to buy something that wasn't essential, I moved that money up to my savings account.
Create a budget to save. I get paid weekly, so every week, I created a line item in my budget to allocate a specific set amount of money towards SAVINGS. In addition to this amount, I have a small amount ($50/week) on autopay to go towards my savings account automatically. There's no scientific reason why I do this. In the beginning, I was creating a habit to save and needed a place to start so I chose the autopay option first. Now that I'm more disciplined, I add extra amounts of money weekly, towards my savings account.
Open up a high yield savings accounts for your emergency funds. My emergency funds savings account is not connected to my checking account. It is safely funded in an online high yield savings account. This helped me not be tempted to withdraw the money so easily in the beginning because I didn't have direct access to it. It will take 2-3 business days to access my money and that keeps me from emotional spending or borrowing from my emergency fund to pay for non-emergencies that come up. Honestly, this was the most crucial part of me saving my first $1,000 so quickly.
Stop buying unnecessary groceries. I get asked this question a lot and created a blog post here to help you save money while grocery shopping. I stopped walking through all the aisles in the grocery store and just throwing stuff in my cart to buy, that would eventually go to waste. I created a budget for groceries, I wrote a weekly list of items I needed, 98% of the time I stuck to only buying what's on the list and moved any access money remaining from that grocery budget, you guessed it....... to my savings account. My philosophy is very simple, anytime you have money leftover from any budget...... SAVE IT!!
Put the debit card/credit cards away sis! Right now, everyone is having a sale on something. That doesn't mean that you need to buy it. I love Amazon just like anyone else, however, I knew that anything I wanted to purchase then, would eventually be on sale again. Or I decided that I didn't need whatever I wanted, right away. Keeping your savings goals as a PRIORITY with every decision you make, is key to accomplishing your financial goals. Ask yourself whenever you get in those tempting moments (there will definitely be plenty of them), do I really need this item or is this something that I can buy later with cash AFTER I meet my goal?
Side hustle deposits. I have multiple streams of income so therefore, I was able to allocate a couple of my side hustle monies, strictly towards my savings account. If you don't have a side hustle, you can get a part-time job or think of a seasonal side hustle that you can do to earn income from and save all of those earnings.
I'm a very simple human being and I learn my best by being taught in the simplest ways. The tips I mentioned above are NOT hard to do daily, weekly or monthly, but it does require you to create the habit of saving and the discipline needed to continue to save. With starting anything new, give yourself permission to make mistakes, learn from them and get yourself back on track. I virtually surrounded myself with people who accomplished this same goal by watching tons of videos on how to save for your emergency funds, grocery tips and hacks and other frugal ideas to help me live below my means and now I know that whenever an emergency arrives, and it will, I'll have the money I need to dissolve that emergency without going into debt!
Your financial situation is different than mine, that's a given however, having an emergency fund saved, will relieve you of so much stress when those rainy days occur in your life. If you have detailed questions about specific savings goals, please reach out to a reputable financial advisor before making any long-term saving decisions.
Do you have an emergency fund? If so, how did you fund it? If not, what are your challenges? Let me know your thoughts and feel free to share any tips you have that will help others save money for their emergencies.