How to Create an Emergency Fund by Snacking and Watching Movies

Have you been binging on movies, TV shows, and snacks lately? Us, too. But while you’re hanging out on the couch indulging in your DoorDash delivery and catching up on the latest Netflix, you can do something good for your finances, too. Believe it or not, snacking and watching movies could actually help you create an emergency fund.

An emergency fund is a stash of money set aside to cover emergencies, from job loss and ER visits to car repairs or a leaky water heater. Your goal should be to have enough money set aside that you could live with no income at all for three to six months. Factors such as your family size, debts you’re paying off, and job stability influence the target. If you’re a high earner, you might need more because it could take longer to replace your income if you lost it. If you're in a two-income home, you might need less because if you lose one income, you would hopefully still have the other.

With an emergency fund, you can prepare for the financial surprises life may throw your way, and give yourself some peace of mind. Here’s how to create an emergency fund the painless way.

How To Create An Emergency Fund Using Round-Up Savings Apps

A relatively new financial tool, round-up savings apps were designed to make it easier and more enjoyable to save money. They connect to your bank and credit card accounts and monitor your transactions. Whenever you make a purchase, round-up apps automatically round the purchase amount up to the nearest dollar. The app then moves the difference to a designated account.

If you order a pizza with your credit card for $9.50, the app rounds that up to $10.00 and transfers $0.50 from your checking account to your goal account. You can then use all of the goal account money you accumulate to create your emergency fund. Some of the most popular round-up savings apps you may want to research* include:

• Chime

• Acorns

• Qapital

Round-up savings apps typically work with all your purchases on linked debit and credit cards. So you can save while buying groceries, filling up your gas tank, or ordering from your favorite online shopping service. 

You can even save on entertainment purchases like online movie rentals and streaming service fees, and of course, the tasty snacks you need to enjoy them. Your mileage will vary, depending on how much you spend and the cost of your purchases.

If you rent a movie for $2.99, for example, your $0.01 savings isn't going to go very far on its own. If you're trying to create an emergency fund even faster, consider looking for a round-up app that lets you increase your round-up amount. Acorns, for example, gives you the ability to round up by as much as 10 times. So a $0.01 savings would become $0.10 in savings. 

You're always free to adjust how much you round up—or whether you use the round-up savings feature at all—so you stay in control. If you're going through a hard time and you need to pause it for a little bit to free up some room in your budget, you can do that. You can resume saving when your life gets back to normal.

The big advantage to this type of app is that it automates your savings so you don't have to manually transfer the funds yourself. This makes sticking to your savings goal much easier than if you had to calculate the round-up yourself, then go into your bank account to arrange the transfer.

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How To Create An Emergency Fund Even Faster

Try one or more of the following to reach your savings target even faster:

• Save a designated amount each month or pay period: If you have extra cash to spare, decide on a dollar amount you want to contribute each month or pay period. Your bank account may enable you to automate a transfer to a savings account on a schedule you choose.

• Save your tax refund: If you expect a tax refund this year, consider putting some or all of this money in your emergency fund. Refunds can be several thousand dollars for some people, so this is a great way to build your emergency fund quickly.

• Save year-end bonuses: If your employer gives you a year-end bonus, you can funnel a chunk of this money into your emergency fund.

• Save birthday and holiday money: If you get cash for your birthday or a holiday, put some of that money in your emergency fund, too. If you get a gift card you can use in place of cash, place a chunk of cash equal to the value of the gift card into your emergency fund.

• Work on paying off debt: Eliminating some debt payments can free up more cash for savings. If you're struggling with debt, consider working with a debt relief program to manage it.

Keep an eye out for even more opportunities to save. Any time you come into unexpected money that you don't need to spend immediately, consider earmarking part of it for your emergency fund.

Creating An Emergency Fund Takes Time And Consistency

Every cent you put away in your emergency fund leaves you more prepared for future financial emergencies. Once you have a goal amount in mind, keep working toward it using the strategies outlined above. Check your progress every month or two to keep yourself motivated, and see if you can identify opportunities to save even more.

*We have linked to quite a few apps and other companies in this post. These aren't recommendations, and we receive no money for mentioning their names. We link to bring you quick access to resources we think you might want to look into.