Emergency Fund Drained During Coronavirus? Here's How to Rebuild
Here's how to refill your emergency fund quickly -- so it's there for you when you need it.
Millions of Americans lost their jobs during the coronavirus pandemic, and a large number who didn't instead saw their income take a hit or their expenses skyrocket. Parents of school-aged children, for example, who normally pay for after-care programs have increasingly had to cover the cost of full-time care as schools have shifted to virtual learning.
If you depleted your savings in the course of the pandemic, you're no doubt in good company. But if that's the case and your circumstances have since improved, now's the time to work on rebuilding. Here are a few ways to do just that.
1. Take on a side job
Side hustles were all the rage before the pandemic began, when you could easily pick up extra shifts at a local restaurant or pop into people's homes and provide cleaning or babysitting services. But these days, employment in general is a lot more restrictive due to the need for social distancing, so getting a side job isn't as simple as it once was.
But that doesn't mean you don't have options. If you want to replenish your emergency fund as quickly as possible, a side gig you do remotely, like web design, editing, or online tutoring, could be your ticket. Furthermore, there may be some in-person work you feel you can do safely like walking dogs or driving for a rideshare company (if you wear a well-fitted mask, insist that passengers mask up, and open windows, you may find that you're comfortable with that setup).
2. Bank your stimulus cash
President Joe Biden is making plans to send a third stimulus check out to the public. If he gets his way, Americans will soon be in line for a $1,400 windfall in addition to the two rounds of stimulus cash that have gone out already. If you were eligible for the previous stimulus rounds, you may or may not qualify for a third check, as there's been talk of lowering the income limits for eligibility. But if your income is $50,000 or less as a single tax filer or $100,000 or less as a married couple that files a joint tax return, you should be set to receive a third stimulus. And that money could do a good job of restoring your emergency savings.
3. Spend more mindfully
Many households have already tweaked their budgets and cut back on spending to accommodate their new reality. If that's the case, you may not have too many expenses you can reasonably slash. But one thing you can do is aim to spend more mindfully. Before you buy items you'd normally classify as essential, take a step back and ask if there's a lower-cost alternative. For example, you may prefer certain supermarket brands, but if the store brands are cheaper and do the job of putting food on the table, go with them and save the difference. In time, those small measures will add up.
It's important to have a healthy emergency fund -- one with enough money to cover at least three months of essential living expenses -- at all times. If you had to drain your savings during the pandemic, make every effort you can to replenish those cash reserves -- before a situation arises where you need money in a pinch.
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