Published in: Banks | Nov. 2, 2019

Raided Your Emergency Fund? Here's How to Rebuild

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If you're out of cash reserves, here's how to boost your bank account quickly. 

Life has a way of throwing costly surprises our way, whether they're in the form of automobile issues, home repairs, or medical bills. That's why it's crucial to have an emergency fund -- money set aside to cover unplanned expenses so that you're not forced to rack up debt when they arise. 

Ideally, your emergency fund should have enough money to cover three to six months of essential living expenses. But what happens if you managed to sock away that much cash in a savings account, only to find yourself back to square one after you've dealt with an emergency?

A treasure chest peeking up out of the sand.

Image source: Getty Images

If you had no choice but to raid your emergency fund, there's no need to feel guilty about using that money for unavoidable bills that hit you out of the blue. At the same time, however, you'll want to work on rebuilding that account so that there's money in it the next time something expensive happens. Here's how to amass some cash reserves and buy yourself the protection you need. 

1. Cut back on expenses in your budget

If your current spending is such that you're able to pay your bills, enjoy a few luxuries, and still have a modest amount of money left over each month for savings purposes, then there's no need to make drastic long-term spending changes. 

But if you need to rebuild your emergency fund, you'll need to make some substantial cut backs on a temporary basis. To this end, go through your budget, see where you're allocating money to non-essentials, and reduce your spending in those categories immediately. This could mean canceling cable for six months, or skipping restaurant meals and concerts for a similar amount of time until your savings balance looks healthier. 

2. Get a second job

You probably need much of the money from your regular paycheck to cover non-negotiable bills -- things like rent, car payments and maintenance, and student loan payments. The beauty of getting a second job, however, is that the money you take in from it won't be earmarked for existing expenses. As such, you'll have the option to stick all of it in the bank and replenish the emergency fund you were forced to deplete. 

The best part? That second gig of yours doesn't have to be miserable. If the idea of waiting tables on weekends or working at a call center during your evening hours doesn't hold much (or any) appeal, find a job you'd actually prefer to do instead. This can mean walking dogs, selling homemade crafts for cash, or moonlighting as an event photographer. 

3. Go on a selling spree

Chances are that there are items sitting around in your closets, basement, or garage that you no longer need, or are willing to part with. If that's the case, taking some inventory and getting aggressive about selling those possessions could put a nice chunk of money back in your pocket -- money you can then stick directly into the bank. 

When you spend months (if not years) building emergency savings, it can be disheartening to see your account balance dwindle down to nothing. But remember that accessing that cash may have prevented you from racking up a pile of debt, and that's a very good thing. And although replenishing that fund won't be easy, if you make it a priority, it could end up happening sooner than you might think. 

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