How To Save $5,000 For An Emergency Fund

By Anthony Vion

Edited by Doug Garfinkel

Growing up, my parents always called it “saving for a rainy day,” but no matter what you want to call it, it’s important to have money put away for emergencies life tends to throw our way. 

But money is tight right now. Most of us are living paycheck to paycheck. How can I put away $5,000 for an Emergency Fund? 

Well, the good news is it’s probably a lot easier than you think. And I’m going to give you some strategies to make it happen. 

With a little dedication and changing the way you do some things, you’ll get there and have peace of mind should you ever need to tap into that rainy day/Emergency Fund.  

Set Realistic Goals 

This is important for anything you want to achieve. If you join a gym with the goal of losing 40 lbs. in 2 days, odds are you’re going to fail, be disappointed and give up. 

The same thing is true for any financial planning. Putting away $5,000 for your Emergency Fund isn’t going to happen overnight. 

Put some thought into it and envision how much you think you can save, realistically. For this article though, we’ll give it a goal of 6 months. After reading through all the strategies below, feel free to adjust the timing based on your personal situation.  

So, that’s $5,000 in your Emergency Fund in 6 months.  

It sounds less scary when you break it down into smaller chunks. Like that’s about $834 a month. Then we’ll take it down even further. 

How does around $208 a week sound? 

Still a little scary. Well, it won’t be when you’re done here. Keep reading. 

Create Your Budget 

Having a budget is a lot different than just thinking about how much money you are spending. It’s about seeing the big picture of where you are spending it against how much money you have coming in. 

Take a few minutes to gather the information you need and make a list. On the left side, add up how much money you are bringing in a month after taxes. 

On the right side, and this is going to be a much longer list, add all your monthly expenses. Mortgage/rent, electricity, heat, water, credit cards, groceries, entertainment, extras, etc. 

If the number is higher on the left side, you’re off to a good start. Compare that number to your $834 goal and see where you stand. 

If the number on the right side is higher, which it probably is for a good deal of us, we have some work to do, which is OK and why we are here in the first place. 

Start Adjusting Your Budget 

On the left side of your list, there’s probably not a lot of wiggle room with the mortgage/rent and utility payments.  

But, when you take a deep dive into your grocery bills, entertainment, restaurant bills and the extra stuff you’re spending on, I’ll bet there are some savings home runs just waiting to be hit. 

Your Weekly Grocery Bill 

Rethinking how and where you shop for groceries could save you up to $800 a month alone. You’re probably not going to find that fact anywhere else on the internet but here, because it’s my own personal experience. 

Five years ago, I did all my grocery shopping at one store, averaging $400 a week. Then my wife told me we can get milk, eggs, bread, produce, meats and so much more for MUCH LOWER prices at places like Aldi and Lidl (or similar stores near you). 

So now I split my grocery shopping between the 3 stores, doing about 10 minutes of research a week comparing sale prices, and it’s saving me around $200 every single week. 

Even if you aren’t shopping on the same scale for a family of 4, you could still probably save around $50 a week, which is a great start for your Emergency Fund.  

Entertainment  

    A.  Subscription Plans 

This one is usually a big eye-opener. How many streaming subscriptions are you paying for right now? Netflix, Amazon Prime (I get it that this one has a lot more perks), Hulu, Paramount+, Peacock, ESPN+, and on and on and on. 

Make an honest assessment. Can you do with only keeping your top 2? If so, you’ll probably be able to save between $20-$70 a month right here. 

Deeper dive, are you paying extra to watch movies early? If so, wait the few weeks and take the instant savings. 

   B.  Movies and Sporting Events 

How many times a month are you going out for entertainment (dining excluded, we’ll hit on that later)?  

Going to the movies twice a month? With concession stand costs, that’s probably running a family of 4 over $100 a month.  

Check out your local library’s movie selection. It’s free and probably a lot better than you think. Even if you cut back to once a month, that’s $50 a month into the Emergency Fund. 

Going to professional sporting events? You probably need to take out a loan the way those costs are rising. Take a few months off, watch the game on TV and bank the cash.  

There may even be a minor league team in your area that’s a lot cheaper and a lot of fun. We have a great time at the Long Island Ducks baseball games. 

Dining Out/Food Delivery 

This is where most of us can build that Emergency Fund a lot faster.  

How often are you eating out in restaurants and/or getting food delivered? Now add those bills up for the month. Your mouth is probably open right now staring at that number. 

Cut back, dramatically if you can. Cook more at home, Treat going out to dinner as a luxury and try to cap it at once a month and for special occasions.  

And please, for goodness sake, stop getting food delivered. With all the fees, you are throwing away a ton of money. 

If I were a betting man, I’d say you could probably save over $400 a month for your Emergency Fund in this area alone. 

The “Nice-To-Haves” 

If you really think about it, are there little things that you could cut out of your daily routine that can add up to big savings … and get you to your Emergency Fund goal faster? 

Are you buying your coffee out every day at $5 or more a pop? Make it at home.  

Buying lunch 5 days a week at the office for $10-$15? Bring a sandwich or leftovers. 

Buying bottled water for $2 each? Bottle your own or fill a big travel mug. 

Spending money on lottery tickets or scratch offs every week? Bet on yourself and bank that money. 

There is so much savings potential here. Take some time to explore your habits and you’ll see it’s pretty easy to make some money-saving adjustments. 

Check Your Credit Card Interest Rates 

If you’re carrying a balance on your credit cards, see what the interest rate is. If it’s high, consider transferring your balance to a card with a lower rate. 

Or even consolidating your debt so you’re only making one lower payment instead of multiple higher ones. Every dollar you save goes in the Emergency Fund.  

Ask For A Raise 

Been a while since your last pay bump? Doesn’t hurt to ask. 

Get A Side Hustle 

The majority of Americans are doing something on the side these days to help offset the rise in costs on almost everything. 

What are you good at? Writing, making crafts, whatever it is, there’s a way to make a few extra bucks a week doing it. 

Download Cash Back Apps 

Ibotta, Fetch and Upside are my faves, but there are hundreds of apps out there you can get real money back just for using them. 

Open A High Yield Savings Account 

Put all the money you save here and watch it grow even faster! 

Keep Tabs On Your Progress 

How does your Emergency Fund look after the first week? The first month? Keep detailed notes on what’s working well and what may not be panning out like you hoped. 

As you go, you’ll notice more ideas presenting themselves that will help you achieve your goal faster. 

Revisit your goal after the first 2 months. Are you ahead of the pace for $5,000 in 6 months? If so, great. You can adjust the timeline or increase the dollar amount. 

If you’re behind, double down on your efforts. The savings are there. You just have to want them. 

Good luck, I know you’re going to get there.  

(Disclaimer: This article is for informational and educational purposes only. The advice given isn’t a guarantee for creating an Emergency Fund within a specific timeframe.)