3 Strategies to Boost Your Emergency Fund by $1,000 by the End of the Year

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Want to grow your emergency savings nicely? These moves could leave you with an extra $1,000 by the time 2024 wraps up. [[{“value”:”

You never know when life might throw a financial surprise your way. That surprise could be a medical episode that results in a costly bill or a car repair that leaves you with a $750 charge on your credit card.

That’s why it’s so important to have a solid emergency fund at all times. And if possible, it’s best to have enough money in your savings account to cover at least three months of essential expenses — things like rent, food, and medication.

Building a three-month emergency fund may not be attainable for you this year if you currently have very little money saved. But with the right moves, you might easily grow your savings by $1,000 before 2024 wraps up. Here are some strategies to consider that might help.

1. Bank your tax refund

As of April 5, the average tax refund issued by the IRS was $3,011. Even if your refund is only one-third that size, putting that money into the bank rather than spending it could leave your emergency fund in a much better place.

In fact, even if you have debt you’re currently carrying, it still makes sense to put your refund into savings rather than pay your debt off. The reason? Without that money in the bank, you risk taking on more debt should another unplanned expense arise. So you’re better off banking your refund and then taking steps to whittle down the debt you have.

2. Join the gig economy

It’s definitely not an easy thing to work a side hustle into your schedule when it’s already jam-packed. But you may be surprised at how a relatively low-key side hustle can yield great results.

In a recent earnings call, Uber said that its typical driver earns about $23 an hour after accounting for expenses like gas and maintenance. So if you’re aiming for an additional $1,000 in savings, it might take about 44 hours of driving for a service like Uber to meet that goal if you can earn that same hourly rate.

Of course, your ability to earn that same rate isn’t a given. And if you want to net $1,000 in income, you may need to earn more like $1,200 to account for taxes, which would then require more like 52 hours of work on your part. But still, over a roughly eight-month period, that’s 6.5 hours of side hustling per month, or under two hours per week. In other words, it’s a gig that may be doable even if you aren’t exactly overloaded with free time.

3. Practice more mindful spending

It’s not reasonable to curb all your leisure spending until your savings account is in a better place. But what you can do is practice more mindful spending in the coming months to see if it helps free up cash to add to your emergency fund.

Each time you’re looking to buy something non-essential, like a takeout meal or clothing that you don’t need for work, ask yourself whether it’s really worth the money and whether it’ll really bring you joy. If the answer is yes, then go for it. It may very well be the case that a $25 takeout dinner will make you happy after a long day at work that’s left you utterly exhausted.

But you may, from time to time, come to the realization that you’re about to make a purchase you can pretty easily shrug off and go without. And if you do that numerous times over between now and late December, you might be able to grow your savings nicely.

It’s definitely not easy to add more money to your savings account. But if you follow these tips, you may end up $1,000 richer by the end of 2024.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.

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