My 5-Step Strategy for Saving $3,000 in a Few Months

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• After an unexpected surgery, I knew I had to build an emergency fund for myself.
• I started with the goal of saving a “baby” emergency fund of $3,000.
• I followed a five-step strategy, starting with automating deposits to my savings account.

It’s no secret that most Americans lack sufficient savings. Some of us may not think about preparing for a rainy day until a rainy day comes along. 

For me, having debt played a big role in not being able to save as much as I’d like. In 2015, I was motivated to get rid of a high-interest car loan and some credit card balances, but I wasn’t putting much in savings. Then, an unexpected surgery showed me the importance of having emergency savings set aside.

Still, going from $0 to $10,000 or $20,000 saved seemed so daunting. Experts recommend setting aside three to six months of expenses in an emergency fund. This means if your monthly minimum expenses are $4,000, you’d need to save around $12,000 to cover three months. Saving large lump-sum amounts of money can seem motivating, but it can also be intimidating if you’re just starting out.

I chose to start with a “baby” emergency fund because, let’s face it — we all have to start somewhere. Saving something is better than nothing, and I like to break bigger goals down into more realistic milestones. Before you can save six months of expenses, you have to be able to save one month of expenses. So that’s where I set my initial benchmark.

Here are some key things I did to save $3,000 in just a few months.

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1. Working savings into my budget

There are so many different places your money can go. Before you know it, you may reach the end of another month and realize you don’t have enough leftover to save. To avoid this, I made a commitment to myself to reach this initial goal and started budgeting for it right away. 

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You won’t know how much you can afford to save if you don’t include it in your budget. I added a savings category to my budget and contributed to it as soon as I got paid. That way, there was no time for any distractions to pop up and redirect my spending.

2. Cutting some expenses to create more cash flow

Cutting expenses can easily give you more cash flow and financial relief, so this was my next step. 

I used a spreadsheet to create my budget, and this allowed me to quickly play around with the figures for each spending category to see what I could afford to cut and how much I’d save. (You can also do this in one of the best budgeting apps.)

Suddenly, $50 cut from grocery spending, $100 cut from dining out, and a few canceled subscriptions added up to a reasonable amount. This freed up money that could be redirected to savings. 

3. Finding one-time extra income opportunities

In my case, I had time to pick up a flexible side hustle, but I know some people may not. Either way, leveraging one-time extra income opportunities helped me grow my savings account balance fast.

I sold items on the Facebook Marketplace, like my son’s old gaming chair, a clothing mannequin that just sat in my closet taking up space, a few old lamps, wall decorations, and other items. Even though I didn’t have any really fancy furniture, expensive clothing, or purses to sell, there was a lot lying around my home that we didn’t use. I spent an afternoon gathering up these items, then listed them for sale on the Marketplace and Offer Up. 

At the time, I worked at a web design company and my boss offered the team a bonus if we launched a certain number of websites by the end of the month. This incentive motivated me to reach the goal so I could contribute more to my baby emergency fund.

Any other windfalls that I received went straight to savings, whether it was a tax refund, a credit from a bill company, or birthday money. 

4. Earning extra money on the side regularly

Getting a one-time income boost made me realize that what I really wanted to do was diversify my income and increase my earnings regularly. Earning extra money is one of the best ways to expedite any financial goal you have.

Obtaining a part-time job was difficult for me since I wanted to be at home with my son after work each day. So I turned to the internet for flexible work that I could do from home and started writing content for companies and helping small businesses manage their social media pages.

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5. Avoiding the save-spend cycle

Even though my emergency fund amount was small, I wanted to guard it carefully. Sometimes it’s easy to fall into the cycle of saving up your hard-earned money over time just to spend it on something a few weeks after you hit your goal. Imagine if I worked hard to save $3,000, then withdrew the money to spend on something important just a few months later. I’d have to start all over again. 

I know that my emergency fund money is meant to be spent one day. However, setting strict guidelines allowed me to gain the discipline to keep the money in my high-yield savings account. The guidelines you set for withdrawing savings are totally up to you. 

I decided to categorize a true financial emergency as one of three things: a severe medical emergency, a direct threat to our home’s functionality (say bad storm damage or something that insurance wouldn’t cover fully), or a complete loss of income in our household.

If the expense didn’t fall under one of those three categories, I steered clear of touching the money. This allowed me to come up with other creative ways to cash flow expenses and plan for other future costs, like car repairs and maintenance, for example. 

Plus, having strict guidelines for your savings allows you to build on that emergency fund and grow your balance to the next stage over time.

This article was originally published in May 2020.