A blown transmission. A medical bill. A house fire. There are hundreds and hundreds of emergencies that happen every day. For many people, these emergencies are not only physically and emotionally devastating, but they are also financially harmful. This makes having an emergency fund particularly essential.
 
An emergency fund is a fund to protect you in the event something catastrophic happens. There is no set rule that says how much money your fund should involve, but a good rule of thumb is to set a goal of eventually accruing about half a year’s salary.
 
It takes time and discipline, but there are several ways to help furnish your emergency fund. Consider doing the following:

Put off Vacations: No one said accruing an emergency fund was easy; certain sacrifices must be made in order to get it done. One of these is vacations. Because vacations are often very expensive - with airfare, hotels, rental cars, and the twenty souvenir t-shirts you just have to have all adding up - they should be put off until your emergency fund is complete. And no, going to Hawaii or Mexico does not constitute an emergency.

Pay With Cash When Possible: Paying for things in cash helps your emergency fund in two ways. First of all, cash forces you to budget: you are less likely to buy impulsively when you are paying with actual money. Second of all, paying in cash allows you to add that extra change - a dollar here, a quarter there - to your emergency fund. Believe it or not, even a penny or two adds up.
 
If paying in cash isn’t possible, try to budget anyway. Any money that you save through budgeting, add to your emergency fund.

Get Rid of Things you Don’t Need: We all spend money each month on things we don’t need: magazine subscriptions we don’t read, cable we don’t watch. If you find yourself paying a monthly fee for something you rarely, if ever use, cancel it and put the money you save in your emergency fund. And, if you own something you never use, sell it: put that untouched baby grand piano on Craigslist or sell it at a yard sale.
 
Preparing an emergency fund is also an ideal time to rid yourself of bad habits. If you are a smoker, for instance, quitting smoking can save you money, not to mention your life.

Add a Little Each Month: Making a point to add to your emergency fund on a consistent basis will help it accrue a lot quicker than simply adding in a little here and there. One great way to do this is to pretend it is a bill. Set a due date for yourself and, each month, pay your emergency fund “bill” by setting some money aside. It’s a great way to consistently contribute and - unless you are a stickler - it’s one bill where you won’t have to worry about late fees.

Buy Nothing for a Month: A month might seem like a ridiculously long time to buy nothing, but it might not be as hard as you think. Committing to buying new clothes, not going to the mall, and taking your lunch to work for thirty days can do wonders for your emergency fund.

Rent out a Room: If your find yourself living alone in a four bedroom house or having a finished basement that never gets used, consider renting it out. Renting a room is one of the easiest and most effective ways to make a little extra money. If you put your tenants rent into your emergency fund, you’ll be fully funded before you know it.

Save your Bonus: Receiving a bonus at work is a great thing: you might want to use it for a new mountain bike or to redo your upstairs bathroom. But, put those things off for a while. Instead, put your bonus - or even your tax refund - into your emergency fund. Your upstairs bathroom will still be waiting for you once your accrual goal is met.

Get Rid of Bad Debts: Paying off your debt may seem like the opposite of saving money, but it will do just that in the long run. Getting rid of bad debt, such as high interest credit or department store cards, will eventually free up all kinds of extra money and allow you to put anything extra into your emergency fund. If you are unable to pay off debt on your own, or need someone to negotiate for you, try using a debt management or debt settlement company. They are experts in paying off bad debt.

Having an emergency fund is a great way to proactively prepare for life’s surprises. It protects you financially by making sure you can spare the money you need to deal with the emergency at hand. An emergency fund is not hard to start and - with just a little effort on your part - it’s not that hard to finish either.