How to Build an Emergency Fund If You're Broke

There has never been a more important time to have an emergency stash of cash than today. Unfortunately, there may never be a harder time to do so. An emergency fund will prevent you from whipping out that plastic and get you through tough times in the future. If you are currently broke, follow these steps to amass some cash and start an emergency fund.

Amass cash

1. Start selling! Look around your closet, attic, garage, basement and your house in general for cast-off items you don't use anymore. You can sell these items at a garage sale, consignment store, eBay, or Craigslist to earn some serious cash. You will be surprised at all the items you have lying around that others will pay for.

2. Get a part time job. You can easily find part time work, start your own business, or perform some freelancing work. You might even perform domestic or handyman jobs for friends and neighbors that don't have the time to do so. Save this extra income for your emergency fund.

3. Rein in your spending. You can switch to a less expensive calling plan, cut the premium cable channels, or stop ordering in pizza. By cutting unnecessary expenses, you can amass cash for your emergency fund.

4. Pay yourself first. At the start of every day pay yourself five dollars, or whatever you can easily afford. Take this money and put it in a drawer. Weekly, take this money to your bank and deposit it. You can quickly start saving some money with the added bonus of building good savings habits.

5. Build on your new savings habit by stashing any extra money such as raises, bonuses, rebate checks, etc. in your emergency fund.

6. Don't stop here! Keep thinking of ideas to earn extra money and stash it away. Look for opportunities online, focus groups, or survey taking.

How to use your emergency fund

1. The key here is that you shouldn't use it! Your emergency fund should not be readily accessible. Consider a money market account that carries a minimum requirement, earns a good interest rate, and has limited withdrawals available.

2. Continue to grow your emergency fund whenever you can. The bigger it is, the more secure you will be and better prepared to weather economic uncertainty.

By following some of these ideas, you will be able to start amassing cash and building your emergency fund. If you do several strategies at once, you will build it quicker than you think!