Unconventional Daily Habits to Boost Your Starter Emergency Fund
- Team at LSH
- Feb 4
- 5 min read
Building a starter emergency fund, say of $1,000 as highlighted in 'Out of sight, a starter emergency fund can grow in safety', can feel like a daunting challenge, especially when life tends to throw lots of unexpected expenses our way. However, simple daily habits can help make that financial cushion a reality without drastically changing your lifestyle. In this post, we’ll explore low-key habits you can incorporate into your daily routine that will help lead to a starter emergency fund.
Start Small with Spare Change
One of the easiest ways to begin is by integrating the habit of savings, by collecting spare change as you go about your day, as mentioned in 'Using micro-transactions to build the Habit of 10%'. See a quarter or dime on the ground, pick it up. Have some change left after you've paid in cash for some items, add it to your spare change container. You might not notice it accumulating, but those small coins can add up to significant amounts over time.
Set up a designated jar or container in your home, and each evening or whenever you have change in hand, toss in the coins you collect. I like using an old tea tin, it's a good size and holds a fair bit of coins. At the end of each month, you’ll be surprised at how much you’ve saved. This method doesn't require you to change your daily spending habits significantly, making it an effortless addition to your routine. A service like Coinstar can convert your coins to cash.
Meal Prep to Save on Groceries
Food expenses can be a major drain on your budget. In 2024 for example in the United States, Americans on average spent approximately $166/month per person on eating out (Escoffier, 2024). Men tend "to spend 19% more dining out than women" (Escoffier, 2024). To combat this, consider meal prepping once or twice a week. Not only does it save you the hassle of cooking every day, but it also helps keep grocery costs down.
Plan your meals ahead of time and create a shopping list specifically tailored to those dishes. Stick to the list to avoid those tempting impulse buys that can throw your budget off course. Meal prepping ensures healthier eating while simultaneously allowing you to save money—both contributing factors to building that starter emergency fund! Or that vacation. 😉
Use Hard Cash Instead of Cards
While swiping your credit card is convenient, it often leads to overspending as highlighted in 'Harnessing the power of cash and debit cards to change your spending habits'. Consider adopting a cash-only approach for certain categories of spending, like groceries or entertainment. Do this for a period of a month to two months to start building the habit.
If you want to use hard cash, set a budget and take out the allocated cash for each category. Once the cash is gone, you can't spend more! This tactic encourages mindful spending and helps you develop a greater awareness of where your money is going, leading to savings you can funnel into your emergency fund.
Automate Your Savings
Take the hassle out of saving by automating your transfers to your savings account. Most banks allow you to set up automatic transfers on a daily, weekly, or monthly basis.
Decide on a fixed amount that can be comfortably deducted from your checking account. For example the Habit of 10%. Making this move ensures you’re consistently putting money away for a rainy day without even thinking about it. Before you know it, your starter emergency fund will flourish and have reached Baby Step 1 of $1,000!
Click here for a free tool to help you figure how long it could take you to save $1,000. The link to the Google Sheet 'How long it takes to hit Baby Step 1' is here, and you need to create a copy to use it directly.
https://docs.google.com/spreadsheets/d/19rebZXCVzyAZ4IwZmezSZD0Ljlt5hRXJutcb0TQvDJI/edit?usp=sharing. The content is for informational purposes only, you should not construe any such information or material as legal, tax, investment, financial, or other advice. Any reference to specific products or services in this document is for informational purposes only and does not constitute an endorsement by Little Success Habits.
Cancel Unused Subscriptions
It’s astonishing how many monthly subscriptions we tend to forget about over time. Services like streaming platforms, magazines, or gym memberships can add up quickly. A CNET-commissioned survey [of 2,343 U.S. adults, of whom 1,929 are currently paying or have paid for a subscription in the past year (Wolny, 2024)], found that survey respondents "spend an average of $91 on subscription services each month". We've all forgotten subscriptions after the trial period, and the survey found a "total of 48% of respondents said they had signed up for a free trial of a paid subscription and then forgot to cancel it" (Wolny, 2024). Ouch! That's a lot of easy money to find in your budget for your starter emergency fund or savings.
Review your monthly subscriptions, and cancel any that you don’t use regularly. Or regularly enough to justify it staying. You might be amazed at how much money you can save—money that can be put directly into your starter emergency fund.
Give Your Mindset a Makeover
Sometimes, the most significant changes come from within. If you frequently find yourself in a scarcity mindset, it can be challenging to prioritize saving.
Shift your perspective to focus on abundance instead. Remind yourself of the importance of financial security and how building an emergency fund will provide you peace of mind. A positive mindset can lead to better financial habits and decisions, making it easier to contribute to that fund effectively.
Reduce Impulse Purchases
That new gadget or trendy outfit might catch your eye, but practicing mindfulness against impulse buys can save a lot of money. You can use the habit of waiting, as highlighted in 'Wait... you can get it if you still want it later'.
Before making a purchase, ask yourself if it’s a want or a need. Wait a day or a few days, giving you time to figure if you still want to buy it. This habit reduces unnecessary expenses and allows that unspent money to be contributed to your starter emergency fund instead.
Conclusion
Implementing even a few of these simple daily habits can lead to significant savings over a short time, assisting you on your journey to build a robust starter and then a full emergency fund. Remember, the key is consistency and mindfulness in managing your finances. With dedication and creativity, you can create a safety net that will help you weather the financial storms that may come your way.
So, are you ready to start saving for that rainy day? Embrace these habits and small behavioral changes, and watch your starter emergency fund grow!
To your success.
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