Most financially savvy individuals and financial planners impress the importance of obtaining an emergency fund. After all, life has a way of surprising you, and not always in a good way.

Whether you’re laid off from your job, undergo a medical emergency, or suffer another life-change, you’re usually caught unprepared. Hence, where an emergency fund comes in.

How to Build an Emergency Fund on a Tight Budget

Generally speaking, it’s often said that you’re emergency fund should hold at least six-months-worth of salary and expenses. This amount isn’t quick to accumulate, especially if money is tight.

Nonetheless, tight budget or not, building an emergency fund can be done. So, if you’re in one such situation, follow these five steps to start saving for your emergency fund.


Step 1
Set a Goal & Simply Start

Setting your goal and getting started is the first, and possibly most difficult step. Start by simply calculating your income over six to eight months and use that as your emergency fund target.

From there create a separate fund so you have a proper place to begin saving your money. Never keep your money altogether, as it’ll be all too tempting to dip into the moment you find something you just have to have.

Lastly, to get yourself started, save what you can and when. Even if you have to start small, every little bit counts.

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Step 2
Figure Out Where You Can Cut Back

If your budget is already tight, you might think this is impossible. That being said, there are little luxuries that we’ve conditioned ourselves to think we need, when the truth is quite opposite.

How to Build an Emergency Fund on a Tight Budget

Do you get coffee every day or have multiple subscriptions? Take the time to sit down and write out every expense you have. Chance are, you’ll find one or two areas that you can either cut back or cut out while you save to build an emergency fund.

Step 3
Earn Extra Money

A tight budget likely means that there’s just not enough of your monthly salary leftover for much more than your usual expenses. If that’s the case, it might be time to find alternative ways to earn a little extra.

Find a skill you can profit from, such as writing or designing and going freelance, using your art or craft skills to sell items, or even finding everyday jobs you could offer up to your friends, family, and neighbors.

How to Build an Emergency Fund on a Tight Budget

Whatever you choose, find a way to start a side hustle or part-time job to help increase your net income. By doing so, you can use that extra as a way to fund your emergency account.

Step 4
Declutter for Cash

As consumers, we have a habit of accumulating more than we often need or use. That being the case, look around your home and find items and clothing you no longer need or use and see if you can make a profit from them.

With Craigslist, Ebay, yard sales, and consignment stores, there’s no shortage of venues you can use to sell the unnecessary or excess items in your life. While you might not make a fortune, depending on what you sell, it can be a great way to earn a little extra to get you started.

Step 5
Be Smart with the Excess

One of your greatest resources for building your emergency fund is using any surplus to your advantage. Whether you receive a raise, have a side job, or earn a great tax return, they all garner a significant amount that could help bulk up your emergency fund.

So, whenever you receive extra income, do your best to immediately place it into your emergency fund immediately. This will help keep you from using it for other wants.


An emergency fund truly is an important resource to have, and when life takes a turn, you’ll be extremely thankful it’s there. Saving for it, however, can feel like climbing a mountain, especially when you don’t have the excess resources to do so.

Nonetheless, there are ways to work towards your target even on a strict budget. Use every resource available to you and get a little creative. You might be surprised how much you can save!


About Kayla Sloan

Kayla Sloan is a freelance writer who covers business and personal finance. She has been featured in The Huffington Post, Time, Entrepreneur Magazine, and more. Kayla is passionate about helping people improve their finances so they can pursue their dreams.

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