How to save the money you need for an emergency…even in the middle of a pandemic.

COVID-19 has illustrated how an emergency fund is the difference between weathering a setback and spiraling into debt to get by. Historically, Americans have not been great savers. In 2016, Bankrate reported that fewer than half of adults had $1,000 in their savings. And that nearly half have no money saved at all.

The reason why is clear: most Americans are living paycheck to paycheck. But it’s not just a question of class. A full 25 percent of Americans making $150,000 a year or more are living paycheck to paycheck, according to recent Nielsen research. But it doesn’t have to be that way.

This article will show you three easy, actionable steps to build your first $1,000 fast. Even if you’re low income. Even if you just lost your job.

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Create a Budget Plan

If you’ve never created a budget before, you’re about to learn how. We have an in-depth article answering everything you need to know about creating and using a budget. It’s an essential first step in building your savings.

Once you have a budget, it’s time to plan. Right now, you need $1,000 in your emergency fund, and you need to save extra money as soon as possible.

How fast you save depends on how much you make and how much you spend. The more you make, and the less you spend, the easier it will be to save money you need. For people with more obligations—if you’re a single parent or caring for a family member—this will be tricky.

But don’t give up before you start. The first $1,000 you save is the hardest. If it seems impossible, we promise you it’s not. If you are experiencing financial hardship, be sure to use everything at your disposal:

  • Unemployment insurance
  • WIC
  • SNAP
  • Food banks

Cut Monthly Expenses

Once you’ve put in the time to build your budget, you’re so much closer to reaching your financial goals. So take a second to feel your power: this is the feeling of taking control of your finances. 

Feeling your power? Good. That’ll help you make some tough decisions as you ruthlessly slash your expenses

Begin by cutting at the things in your budgets that are things you want that aren’t essential. You don’t have to cut everything you enjoy from your budget, but be strategic. There are many low-cost alternatives available to you. 

High Costs for Rent Get a roommate, negotiate for lower rent, downsize
Expensive Mortgage Add a roommate, downsize to a more affordable home
High Home Insurance Premium Comparison shop with Insurify, raise deductibles
Expensive Groceries Make more of your meals vegetarian
Financed Car/ Car Loan Trade in for a car you own outright
Expensive Car Insurance Comparison shop with Insurify, raise deductibles
Smartphone and unlimited data Small data package, use a flip phone
Cable TV  Switch to Netflix or other streaming services
Gym membership  Work out at home

Now take a look at your necessities. Things like your rent, utilities, car, and groceries. These are things that are essential to a healthy life. But we bet that there are still ways to save, like driving less and choosing more vegetarian meals.

Remember: the less you spend, the more you save. So spend on what brings you the most joy for the least amount of money.

How to Save Money Fast

That surplus you just created by cutting your expenses? Put it all towards your emergency fund

But don’t keep your emergency fund just anywhere. It has to be accessible when you need it. You can’t invest it in stocks, because if the stock market crashes, so will the value of your savings. You can’t put it in bonds or a certificate of deposit because you’ll be penalized for withdrawing early.

And it really can’t be hanging out in your day-to-day bank account where you’ll be more likely to spend it.

That’s why we recommend putting your emergency fund into a high-interest savings account. There are a ton of options available, especially if you look into online banks. Don’t worry if it’s a different bank from the one attached to your checking account

Having a small hurdle, like a three day transfer time, can be just the nuisance you need to keep from tapping into that savings to get something you want. 

Don’t forget that this is your first $1,000. Because you’re saving money fast, you’re going to need bigger savings goals soon. Like a down payment on your first home.

More Money-Saving Tips

I Just Lost My Job

If you’ve just lost your job, there are still things you can do to build your savings. But first, be sure to attend to yourself during this time. Job loss is extremely stressful. Make a plan to do something stress-relieving every day.

Steps to take when you’ve lost your job:

  • Apply for unemployment benefits and get an estimate of your new monthly income
  • Go through our list of 47 Ways to Save Money in 2020 for ideas to cut your budget to fit your new income
  • Talk to your service providers about lowering your bills and other COVID-19 relief
  • Consider more significant changes like moving in with a relative or trading in your financed car

Add Income When You Can

Even though the country is on lockdown, there are still ways to make some extra cash. 

  • Hold a virtual garage sale using sites like eBay, Poshmark, and Craigslist
  • Check out freelance work from home, like transcription services or video editing
  • Sell your crafts or rare plant cuttings on sites like Etsy

As social distancing relaxes, consider adding a side hustle to your routine to help you along. A few hours of gardening or walking dogs each week adds up fast. 

The Key to Saving Money Fast? Know Thyself

If you’re going to save a lot of money, you’re going to need to change your habits. There are a lot of temptations for spending. Perfectly normal spending, like going out to eat, can become a problem if it’s charged to a credit card with a balance. 

Everyone has their downfall. Knowing yours will make you a better spender and a master saver. Here are some everyday overspending habits to consider:

Overspending Habit Example Solution
Overspending for Pleasure Overspending on going out, at the salon, shopping sprees Set a firm budget for extras and look for free and low-cost alternatives
Overspending for Status Power watches, luxury cars, new electronics Set a firm budget for luxuries over the year 
Overspending for the Level Up Another Master’s degree or private class you don’t know if you will use Consider alternatives for higher ed or expensive private classes
Overspending Due to Overwhelm Overspending at the grocery store because of fear you’ll run out of food Make a plan before you spend anything so you can get what you need 
Overspending for Convenience Take out and disposable goods Meal planning and investing in reusable alternatives
Overspending on Impulse-Buying Amazon and other non-essential retail purchases Remove apps from your phone and implement the 24-hour rule

How Fast Can You Save?

As we said earlier, how fast you save will depend on your circumstances. But even low-income earners can save. Let’s say you work full time at $12 an hour. That means you’ll be taking home around $1,700 a month. If you save 20 percent of your take-home pay, you’ll save $340 a month. 

Let’s look at an example of that budget:

Rent (Split) $500
Cell Phone $45
Internet (Split) $20
Groceries $160
Student Loans $150
Savings $340
Car Insurance $53
Fuel $45
Utilities (Split) $80
Going Out $50
Personal $35
Health Insurance $185
Other $37
Total $1,700

A budget like this may mean forgoing some really lovely conveniences, like not having a roommate and unlimited data. Still, an inconvenience now can save you from a life-altering financial setback. 

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Updated May 20, 2020

J.J. Starr is a financial copywriter and enjoys helping readers find the information they need. In addition to her background in banking and financial advising, she is also a poet with an MFA from New York University. She lives in Amherst, Massachusetts. You can learn more at