How to Rebuild Your Emergency Fund After Difficult Times

how to rebuild your emergency fund

Things can get expensive when you’re going through difficult times.

Regardless of the challenge that you’re facing, you are likely going to rely on your emergency fund to help you get by. Experts suggest having an emergency fund that can cover at least three to six months of your expenses.

Once you’ve used up your savings, you might feel at a loss. You’ve just used your final lifeline, and you’re on your own now.

Remember that you are meant to spend your emergency fund on emergencies. Consider switching your mindset and looking at this development as a new opportunity to start a brand-new fund from scratch.

After all, what matters most when you fall is picking yourself up again. 

If you’re wondering how to rebuild your emergency fund now, you’re at the right place. Here are some tips that will help:

Start a New Budget

Depending on your situation, you’ll need to spare some time from your day to sit down and strategize your budget. Suppose the difficult time you’re facing is getting laid off, so you end up dipping into your emergency fund for your essentials.

Regardless of the reason you decided to take from your savings, you must understand where your money should go. Once you realize your financial priorities, you’ll have a much better grasp on your expenses.


When starting a new budget after clearing a taking from your emergency fund, you’ll want to focus on funneling most of your income into your savings. 


This is, of course, apart from essentials like rent, utilities, and so on. It’s the remaining income you need to think about managing. 

Following a new budget can be challenging, especially after a major life event that rocked your emergency fund. You’ll need to rethink your spending habits to see any progress.


Plan Your Meals

As an extension to the last point, consider planning your meals to save money on groceries. 

Meal planning involves mapping out what you will eat for breakfast, lunch, and dinner. 

Withouy doing this, it’s very easy to spend on food you don’t need, whether it’s snacks or other food items.


While most people understand they shouldn’t be buying too many snacks, some people’s budgets suffer due to indecisiveness. 


For example, you could be walking around the grocery store and think you’re going to make tacos for dinner one night, but then you decide to cook a roast beef instead, and then you remember you had a recipe for french toast that you couldn’t wait to use. You end up buying all three meals even though you only planned to make one. 

Effective meal planning can help you save around $130 a month (from $1,600 a year). Remember that it takes work to plan what your family will consume in a month, so try budgeting your meals for the week until you get the hang of it.

Eventually, you’ll understand the best, most frugal ways around the grocery store. You might even notice certain items for sale at specific times, giving you another opportunity to save more money on your groceries. 

Any extra money that you end up with after using up your food budget should help rebuild your emergency fund. 


Eliminate Unnecessary Luxuries

If you’re still wondering how to rebuild your emergency fund, ask yourself an important question: Do you constantly buy takeout food or have fancy meals at restaurants? 

You might do well to give them up (at least temporarily) and channel the expenses into rebuilding your emergency instead.

If you already plan your meals, you shouldn’t have to spend extra money on food if you’re only after sustenance. But if you intend to treat yourself after a long, hard, productive work week, then go back to your budget and see if you can squeeze in that restaurant meal.

If you can’t, then it’s best to wait. You can always consider alternatives like baking yourself a fancy meal or a cake to treat yourself. 

Another luxury you can cut back on is your cable TV.


Cutting cable can help you save a little over $100 a month, depending on your provider and plan.


We understand that parting with your source of news or entertainment can be difficult. But reconsider how often you actually sit down and watch TV.

Why do you insist on keeping your cable connection in the first place? If you’re after your favorite TV shows, consider looking into more affordable streaming services that host specific shows instead.

Compared to the average hundred dollars a month for a cable connection, monthly subscription fees for popular streaming services include:

  • Disney+: $7.99
  • Hulu: $6.99
  • Netflix: $9.99

Even if you subscribe to all three at the same time, your monthly TV bill won’t come close to what you were spending on cable.


Find a Side Hustle

You can build your emergency fund much faster if you have an alternate source of income. If your schedule allows for it, try getting a side hustle to earn more money and contribute to your new emergency fund.


Getting a side hustle might be the best option if your current income cannot keep up with the demands of your current job. 


You might want to base your side hustle on a hobby. This way, you can get paid to do something you enjoy.

For instance, dog walking might be a great option for extra income if you can spare time in your schedule for exercise. If you aren’t a fan of animals, consider babysitting instead.

For performance artists, you might want to look into stand-up comedy gigs at your nearest bars and clubs. If people are already laughing at you, you might as well charge them for it.

Working from home has also become a popular side hustle. You could look into your options that align with your interests.

Graphic artists might find luck: 

  • Drawing for children’s books,
  • Illustrating brand logos
  • Opening slots for art commissions

Meanwhile, writers can help with:

  • Writing blog posts
  • Copyediting

Once again, be sure to consider your schedule before picking up a side hustle. Although getting one will surely help you build your emergency fund faster, you might end up doing more harm than good if you burn yourself out working more hours than usual.


Start Selling Items

You might already have a bunch of stuff you’ve been meaning to get off your hands. Go through these things and start organizing them according to what you want to keep, sell, donate, and scrap.

Selling some of the things you own is another great opportunity to boost your income. In particular, reselling clothes could be a huge factor in rebuilding your emergency fund.


Considering that 7% of the average American’s wardrobe consisted of second-hand clothes in 2019, you have a good chance that someone is willing to pay for your pre-loved outfits.


Consider opening up an account on popular secondhand platforms like Depop, Mercari, or Poshmark, and start selling. 

Reselling clothes on similar online fashion marketplaces can help you earn up to $1,500 and $2,500 a month. Of course, these earnings will depend on the items you own.

Go through your closet, review your items, and then research their average rate to maximize their resale value. You might even have vintage pieces in your closet that are worth more today than they were when you bought them (if you remember buying them in the first place).

Alternatively, you could sell things that you make. As an illustrator, you could sell prints or stickers of your art.

Painters have similar opportunities of selling their pieces to those who are keen on owning unique art. Meanwhile, potters could sell their hand-made clay masterpieces on platforms like Etsy.

Regardless of your artistic medium, you may have better chances of selling your pieces if you curate an online audience. Look into the artist communities on social media and see if you can find people interested in owning the pieces you create.


Live In a Smaller Home

After selling a significant chunk of your personal items, you might discover a ton of unused space in your home. Downsizing may be a good idea to consider.

Downsizing involves buying and moving into a smaller house than your current one. Or if you could move to a different neighborhood with a more affordable cost of living.

We understand that this option may not suit everyone. So, be sure to consider your home situation before proceeding with downsizing.

You might want to give this option some more thought if you have unused rooms. Perhaps some family members have moved out, leaving behind an empty bedroom.

That empty room could serve as storage space. But overall, is it truly useful and worth the extra maintenance after going through a difficult time?

Once you realize that you’re paying for that room even if it isn’t contributing to your overall goals, downsizing could help you save more money. Consider giving this tactic more thought as you reflect on your home situation.


Pause Large Financial Goals

It bears repeating that your emergency fund should be your top priority when recovering from difficult times. As such, you might have to put your other savings on hold indefinitely.

Perhaps you’ve been saving for a down payment on a new house. Or you’ve been planning to pay off a major loan.

Nevertheless, you’ll have to postpone them in the meantime. After all, you’ve learned about the value of having a financial safety net, so you’ll want to build it up again. 

Trust that you will eventually pay off that mortgage or loan in full when at the right time. Just be sure to set clear emergency fund goals and then refocus on your long-term financial goals as soon as you can.


Look at Your Insurance Plans

Apart from major bills or financial goals, you might be funneling a significant amount of income on specific insurance policies. We understand that these are necessary investments, but consider reviewing them to see if you have cheaper alternatives.

For instance, you might save more money if you switch your life insurance from whole life to term life. Be sure to discuss your goals with a trusted advisor before taking any drastic measures, though.


Constantly Review the Budget

Be sure to review your new budget as often as you need. You should see how well the strategies you’ve adopted have been working so far.

Your goal when building your savings after difficult times should be to replenish the money you took out from your emergency fund. If you’ve been eliminating extra costs, hustling on the side, and planning your meals but you don’t see any significant changes to your savings, consider regrouping.

Check your monthly budget and see what works and what doesn’t. Then you can adjust accordingly.

For instance, suppose you cut your cable connection to add your monthly TV bill to your emergency fund. But you discover that you’ve been spending more on food delivery services.

Be intentional with your spending habits by reviewing every expense.


Recap: Tips to Rebuilding an Emergency Fund After Going Through Tough Times

Rebuilding your emergency fund involves funneling as much of your extra income to your savings as possible. Difficult times can throw anyone off their financial stability, but there are ways to replenish your lost savings effectively.

Sitting down and planning a budget around your new situation is the best way to begin. Once you know where most of your money goes, you can figure out a way to channel the rest of your income to your financial safety net.

Following the tips that we illustrated above can be easy for anyone to follow. Still, consulting professional advisors about your financial goals can help you achieve them quickly.

Consider speaking to our experts at 121 Financial Credit Union.

Whether you are rebuilding your emergency fund from scratch or working to replenish a small part you took out, we are ready to work with you during this difficult time. Call today at 904-723-6300 or fill out our contact form.

Back to Blog

Related Articles

8 Tips to Build and Save for an Emergency Fund

No matter what your job is, it’s best to save for an emergency fund that can cover three to six...

How to Build an Emergency Fund for Unexpected Expenses

"Into every life, a little rain must fall". "Expect the unexpected." "A bird in the hand is worth...

Checking vs Savings Accounts: What's the Difference?

If you're trying to decide between a checking vs savings account, it's easy to get overwhelmed with...