This podcast episode provides practical tips for building a $500 emergency fund in 90 days. Key points include:

• Breaking down the $500 goal into a more manageable $5.56 per day savings target
• Identifying areas to cut spending, such as subscription services, dining out, and impulse purchases
• Exploring ways to increase income through overtime, side hustles, or finding a higher-paying job
• Automating saving1 transfers to make the process easier
• Utilizing tools like the Payactiv app² to access earned wages³ and avoid fees

Eric Rosenberg:

This is a quick reminder that today’s episode is intended for education and entertainment purposes only and should not be considered financial or legal advice.

Hello friends. Welcome back to Good Cents by Payactiv Podcast. As always, I’m your host, Eric Rosenberg. And today we have a fun and interesting topic that is near and dear to a lot of our hearts, and that is how to deal with a financial emergency. I recently had a chat with a friend about how we can save up a $500 emergency fund in just 90 days, and I want to share some of those tips that I learned here with you.

So to start, we have to break down that number. What is $500 over 90 days? I pulled out my handy dandy calculator and found it’s about $5.56 per day. While saving $500 might seem like a lot, saving $5.56 doesn’t have to seem so hard. If we look at different places in our budget, we can understand where we might be able to trim just about $6 a day, which can add up to our initial emergency fund.

Now remember, emergency funds are for those times where we have a big expense we did not expect, but it is the kind of expense we can plan ahead for. Big examples that we might run into are an unexpected injury or illness. When that happens, you could have a big doctor bill or hospital bill, or you might have to take off work for a few days or even a few weeks. When that’s the case, having cash set aside will help you pay for those bills without going into debt and can help you navigate things like your rent and your other required monthly payments, again, without going into debt, you have the savings right there.

Another place we might see emergencies is our car, and most of us need a car to get to work unless we’re lucky enough to have public transit that’s reliable and easily available. But I know where I live if you don’t have a car, getting to work can be very, very slow and difficult. So what happens if your transmission goes out? What happens if you need new brake pads? There’s so many things that can go wrong with a car. And again, having an emergency fund is key to managing those expenses without going into debt. A last place if you’re a homeowner, I know recently my hot water heater blew up. Of course it happened on New Year’s Day when I wasn’t home. I was visiting my mom and my wife had to navigate that on her own. But because we had an emergency fund, the stressful part was finding the new water heater and someone to install it, not coming up with the money to pay for the water heater.

We’ve also had to replace appliances like a refrigerator and a dishwasher and a washer and dryer in our laundry room. Those expenses happen. They’re not frequent, but we know they will happen at some point. So those are the kinds of places we would use an emergency fund. So when we’re looking at how to save $5.56 a day for 90 days, let’s start by looking at those little expenses that tend to add up over time.

Now, maybe it’s starting with subscriptions. It’s really easy to get in a habit of signing up for new streaming service subscriptions, for example, but do you really need Netflix and Hulu and Disney Plus and Paramount Plus and Peacock and Spotify and YouTube? If you’re paying for all of those, it’s easily a hundred or hundreds of dollars a month. I used to have cable TV. Cable can often cost a hundred dollars a month alone these days. So if you are able to cut back on your subscriptions there, maybe it’s not canceling all of them. Maybe you cancel a few of them. Maybe you just put it on hold for three months or six months because if you’re spending $24 a month on Netflix, if you pause it for one month, that’s four days of your $5.56 per day of savings right there with that one change.

Next, look at places where you spend your food budget. I was talking with my friend Whitney and she was saying she used to go almost every day to get a vanilla latte, and she realized that was costing about $6 a day. So right there, if she could cut that out every day, that would cover the savings goal, that would get us to the $500 we’re trying to get right there. But she said, what if I don’t want to cut my coffee habit totally? Maybe you scale down from a vanilla latte to a plain old drip coffee. Well, that won’t save you the whole $6 a day. Maybe that’ll save you 3 or $4 a day. That’s a big chunk of $5.56 per day. So look at those little expenses and how quickly they can add up.

Also, impulse purchases. If there’s something you don’t really need and haven’t planned ahead for, skip those while building your emergency fund. Finally, think about other parts of your food budget. The grocery store is one of the easiest places to spend too much. In my household we try to do grocery pickup. When we do that we know we’re only buying exactly what we need and we’re not wandering around the store tempted to pick up those extra odds and ends and sweet treats that probably aren’t that good for us anyway and can quickly blow through our grocery budget. So planning ahead, sticking to a list, whether you’re doing pickup or going into the store yourself. The closer you can stick to a list and plan your meals ahead, the easier it is to stay within a specific grocery budget.

Also with your food spending, think about eating out. It might be convenient to go grab lunch during your break from work. Going out to lunch these days can easily be 10 or $15. Imagine if you instead made your lunch at home and brought it with you. I know a lot of people do these meal planning routines, which I think are really cool where you can take a little time on Sunday and plan out and even pre-prepare your meals for the whole week. Maybe you even do breakfast. You can get oatmeal cups together, homemade. You can make sandwiches, you can make salads and a glass jar. I know those mason jar salads are really cool. Whatever you can prepare ahead of time will make it easy to grab that mail and go, and then you don’t have that temptation or that need to go out and buy lunch.

If you’re able to save $10 a day three times a week, let’s say maybe you still want to go out once or twice a week with your friends to grab lunch during work, that can be okay. But if you can cut back from doing that five times a week to only maybe twice a week, that’s $30 you’ve saved right there. That’s about six days of savings over the course of the month when you’re trying to get to that $5.56 per day.

So think about getting really granular into your budget. Look at every single place your dollars go and find ways to come up with that extra $5.56. But remember, it’s not always just about budgeting and saving, though those are very important parts of this. You could also think about extra ways to earn. So if you’re an hourly worker, maybe you volunteer, let your boss know, hey, I have some extra hours available, or I’m trying to save up an emergency fund, maybe you even want to be honest about why you want extra hours. But if you let your boss know you’re available and you want more hours, maybe you’ll get them. If there’s an opportunity to take on overtime that can supercharge your earnings by just tacking on a few extra hours on your work week. If you don’t have that option, you can shop around for a job somewhere else. Perhaps you can get a raise by finding another job somewhere else using those skills you already have.

Or maybe you start a side hustle. I know my entire career started as a side hustle. I wanted to make a little extra money on evenings and weekends on the computer, and I started writing and podcasting and creating video content, and eventually I was able to turn that into a full-time job. So think through what skills you have that someone might be willing to pay for. Maybe you can make crafts. Maybe you’re very artistic, you can sell those on Etsy. Of course, marketing is part of the game too. It has to be a high quality craft someone’s willing to pay for, but that’s definitely something people do to increase their income. Maybe you are a good graphic designer. Maybe you know how to write, maybe you know how to create apps or do computer code. Any of those could be a service that you can offer as a freelancer. There’s lots of big websites out there for freelancers or if you know a local business or have someone in your network who is looking for certain types of assistance, you can offer those services for a fee so you can get paid for those hours that you can work outside of your regular job.

Sometimes it can also be fun to find other ways to make money. I really like seeing every time a payment comes in from anything I do, whether that was my old day jobs or my current job where I work with a lot of different clients. So think about how you can get motivated to increase your income and maybe even feel like it’s a game. Every time you get closer to that $500 goal, give yourself a little reward or check off a box on an app on your phone. Maybe even draw one of those big thermometers that you fill in as you get closer and closer to the $500. And remember, you could also look to apps like ride-sharing or food delivery or grocery delivery or task-based apps. There’s a lot of different apps out there, you can sign up pretty quickly and earn extra income outside of your primary job.

Now remember, this is all harder if you are in debt. So one of the quickest ways to open up your finances to improve your savings could be to pay off credit cards or to pay off and avoid forever predatory payday loans. If you think about credit card debt, if you’re paying $50 a month in interest or $100 a month in interest on your credit cards and you’re able to eliminate that, $100 a month, if you just did that and saved it, you would have a $500 emergency fund saved in five months. Sure that’s a little longer than the 90 days we talked about in the beginning, but that is a clear path to improve your savings. Again, think outside the box. Try to find what motivates you and use the tools and resources you have available.

Maybe you just start at $5 or $10 a week, if that $5.56 a day seems like too much and work your way up. It’s better to start by saving that first dollar. The first dollar is always the hardest, it gets easier from there. And eventually you might be able to save up three to six months of income, which is what a lot of financial experts suggest for an emergency fund. Because again, you don’t know. Hopefully it won’t happen, but people get laid off from their jobs. It could take three, four months to find a new one, or maybe you do have one of those big expenses or two at the same time. And we want to avoid things like credit card debt that cost a lot of interest, and having a good emergency fund is a great way to do that.

Now, if you’re looking for tools to help you reach your goals, one of the best things you can do is to automate. So if you already have a checking and savings account you love, you can often set up a daily or a weekly or a monthly transfer every other week to match your paydays. Whatever makes the most sense for your needs from a checking to a savings account every day when your direct deposit shows up. Now, if you have your direct deposit going into the Payactiv app on your Payactiv card, you can set up those automations right there and keep your savings right there. You can work towards that savings goal with the Payactiv Visa account that works a lot like a bank account, though it’s a unique type of account made just for people like you to help improve their finances and better understand their budget. There’s a ton of free tools and resources in there, so make sure to check out the Payactiv app and how it can help.

Well, that’s all we have for today. Thank you so much for hanging out with us as we talk about how to save up an emergency fund for the first time. Now, whether you’ve never had an emergency fund before or you’re just looking to increase it to $500 or maybe even double that now you know how to get started.

Well, thanks everyone for sticking with us till the end. I hope you found that enjoyable and educational, and I hope you feel really inspired to get your emergency fund saved up. If you’re not already, be sure to follow us on Instagram. You can send us a note on the steps you are taking to save up an emergency fund and those ideas and thoughts and the things that you’re doing might end up in a future episode. So make sure to follow and connect and engage with us there.

Also, if you’re not already using it, head to the Apple App Store or the Google Play Store to download the Payactiv app today. You can get started for free and get early access to your earned wages. So even if payday is a few days away, you might be able to get a portion of that early and there’s no loan to repay, there’s no credit check and there’s no interest. It’s a great way to avoid overdraft fees and late fees and make sure you can reach all of your bill due dates without having any extra added stress of figuring out what to do for those few days if payday is still around the corner.

Thank you all for listening with us till the end, and we hope you enjoyed the show. Until next time, keep living the life you’ve earned.

¹ Goal-based saving is a set-aside account, and you will not receive interest or other earnings on the funds within the goal-based account.

² Standard data rates from your wireless service provider may apply. 

³ Earned Wage Access requires employer participation. Employees can only access a portion of the wages they have earned to date.

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