This Key Decision Made It Possible for Me to Build a 6-Month Emergency Fund Within a Year

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A writer explains how she built a complete emergency fund quickly. Read on to see how she pulled it off. 

From a young age, my parents always emphasized the importance of having money in a savings account. That’s advice I’m glad I took to heart.

Through the years, my emergency fund has bailed me out on numerous occasions. It allowed me to purchase a car when my old one was totaled in a minor accident, and it allowed me to cover costly home repairs without having to resort to expensive credit card debt.

Plus, having a solid emergency fund has just plain given me peace of mind during periods of economic unrest. I know a lot of people who lost their jobs during the Great Recession, and also, at the start of the COVID-19 pandemic. The knowledge that I had money in the bank during those times helped me avoid a lot of stress.

Now for many people, it can take years to build up a strong emergency fund. But I was able to build a six-month emergency fund in less than a year. Here’s how.

A smart post-college decision

I went to college four hours away from home, so living with my parents during my studies was never an option. My original plan was to get an apartment with friends in New York City after graduating, since that’s where I was looking for jobs and eventually found one.

But then I realized that if I were to move in with my parents, who live in Brooklyn, and simply commute to work from my childhood home for a year, I could do a lot of good things for my finances.

So I moved back home for a year after college. And doing so allowed me to not only pay off the debt I incurred in the course of getting my degree, but also, build up enough savings to cover six months of expenses. And when I say six months of expenses, I mean my estimated expenses upon moving out — not my expenses living at home, which were minimal.

When I lived at home that year, I chipped in for groceries, but my parents didn’t ask for any rent and I didn’t contribute toward utilities (even though I offered). That allowed me to sock the bulk of my earnings away.

I also made a point to spend very little that year, knowing I was trying to pay off debt (which thankfully wasn’t so much since I worked throughout college) and build up my savings. I dined out very infrequently, packed lunches almost every day to take to work, and didn’t go out at night often because I had specific goals I wanted to achieve.

A choice that paid off

I know a lot of people who, as full-fledged adults, barely have enough money in savings to cover one month of expenses, let alone six. And a recent SecureSave survey found that 67% of Americans don’t have the cash reserves in savings to cover an unplanned $400 bill.

Once I moved out of my parents’ house, I found that it was much harder to save money. So I’m glad I took the opportunity to build up an emergency fund that year after college.

After living on my own for four years of studies, moving back home was a humbling experience. And it wasn’t always easy. But I remain grateful to this day that it’s the choice I opted for, and that my parents were willing to let me return to the nest for a period of time.

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