You never know when disaster will strike. That’s why it’s essential to have food, water, medication, and personal hygiene items on hand in case of an emergency. It’s equally important to set some money aside for a rainy day. Follow these tips to help you build an emergency fund bit by bit.

• Make a budget: This is as simple as recording your monthly income and expenses on a spreadsheet. It’s easy to remember large, set expenses, such as your rent, utility bills, car payments, and health insurance, but don’t forget about less predictable costs, such as gas, groceries, clothing, and entertainment.
• Cut out extra expenses: If your budget is in the red, you have two options—make more or spend less. It’s often easiest to trim back on non-essentials first. Start making coffee at home, cancel a video streaming service you don’t use much, and have more stay-in date nights.
• Get a second job: Consider working in the evenings or on weekends if necessary. The money you earn can go straight into your emergency fund, giving you a cushion if disaster strikes, not to mention a backup source of income if something unexpected happens with your regular day job.
• Open multiple bank accounts: Do you keep all your money in a checking account? The key to a successful emergency fund is to keep this money in a separate place. Have a “working” checking account you use to pay the bills, and at least one savings account to create a financial cushion you can draw from when necessary.
• Pay yourself first: Deposit 10 percent of your income into your savings account before looking at any other expenses. You can set up an automatic transfer so this happens every month. By learning to live on 90 percent or less of your income, your savings will start to grow organically.
• Save bonuses, raises, and tax returns: You’re accustomed to living on your current wage, so when a little extra money comes your way, tuck it into your savings account. This is a great way to give your emergency fund a quick boost.
• Sell things you don’t need: Consider having a garage sale to trim back on the clothes, electronics, DVDs, books, and furniture you no longer need or use. You would be surprised how much money you can earn for your emergency fund just by selling the stuff you have collected over the years.
• Make insurance a priority: It may cost a little bit each month, but insurance is the key to disaster recovery. Review your homeowner’s or renter’s insurance policies and decide what you might want to add. For instance, flood and earthquake coverage isn’t included by default, so you should purchase a separate policy if you live in a high-risk area.

If the emergency you have been planning for occurs, contact DKI Services for help recovering. We provide storm damage remediation, disaster relief, and more to help you get back on your feet.