How to Build an Emergency Savings Fund: 25 Ways to Make Extra Money

Household debtThe good news is this: America's household debt is dropping. In fact, over the past four years, it has fallen by $833 billion. And, while that was only about 6 percent of the country's total consumer debt, it was still a big drop from our debt high watermark of $13.6 trillion, which the nation hit in 2008.

Unfortunately, there's bad news to balance out the good. That decline in overall household debt does not mean we're doing a better job of saving.

As The Atlantic recently reported, a lot of that debt didn't get removed from the books by families conscientiously cutting expenses, paying down credit cards and loans, and increasing savings. Instead, far too many families saw large portions of their debt burdens evaporate on a painful technicality when their homes went into foreclosure.

So, no: Americans still aren't back on the path to economic security. Real wages fell sharply after 2008, and still haven't returned to their pre-recession levels. And, with unemployment still high, it doesn't look like our paychecks are going to rebound anytime soon.

With this in mind, it's hardly surprising that economic security is at its lowest point in decades. As I noted late last year, the median household wealth in America is at a 43-year low. This is partly due to the great mass of recession foreclosures, but also because a huge segment of the population is simply not earning enough money to save -- and saving is the first step on the road to economic security.

You Need a Cash Cushion. We Have Some Ideas.

There's a general rule of thumb that says a household should have enough of a cash cushion to survive for three months without slipping below the poverty line if its sources of income dry up. Recently, a study by the Corporation for Enterprise Development found that almost 44 percent of U.S. households don't meet this standard. In Alabama, the state that fared worst in the study, almost 64 percent of the population didn't have a big enough a cushion. The state where people were best prepared for a job loss, by the way, was Minnesota, where only 23.6 percent of the people didn't have a sufficient cushion against poverty.

The national march toward financial security is going to take a long time, especially if the current trend toward cutting social programs continues. Meanwhile, for the average family, falling real wages and that disappearing safety net are making it harder to save money.

We want to help.

We've been collecting suggestions about techniques you can use to help build up your cash cushion. So far, we've come up with 25 surprising ways to earn a little more money on the side. If you're interested, take a peek at our list in the gallery below. And if you've got a method that we didn't highlight, drop me a line at or mention it in the comments section.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at, or follow him on Twitter at @bruce1971.

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Some extra tips for even more extra money:

1) drop the smart phone and get a "dumb" one. Save about $50 per month. Get a low-priced tablet (e.g., Kindle Fire) or use your old iPhone as a wi-fi only device. Wi-fi is available everywhere; you really don't need to pay for cell-based data plans
2) call your car and home insurance company and tell them you want to go through all your coverage because you found another carrier that is cheaper. They'll probably help you "find" 10% off or more.
3) speaking of car insurance - An expensive policy from GEICO, Progressive, etc. is not needed. You can find one usually for less than $25/month from Insurance Panda. If you spend too much on car insurance from one of those big companies, chances are you are simply funding their expensive TV ads with cute animals.
4) compare what your house is really worth to your assessment. Many assessments have never been properly adjusted down to reflect the market over the last 4 years. We cut our property taxes by about 20%.
5) re-fi your 30-year mortgage to a 15. The interest rate will drop by at least 50-75 bps, more depending on your current rate. The payment may go up slightly, but it is because you are paying off your loan faster. If it's possible, get the mortgage paid off before the kids go to college. At a minimum, have it paid off before you retire. if you buy life insurance (which you should), don’t overpay. you can get $15 policies from places like Life Ant or gnworth.
6) review your credit card bills for all the things you are paying $10-20 per month for that you no longer need. I bet everybody has at least a couple
7) drop all magazine (paper and on-line) subscriptions. If you look around, you can find comparable content for free.
8) review your investment portfolio for ways to replace higher fee mutual funds or ETFs with lower fee ones. S&P500 funds/ETFs shouldn't charge more than 0.10% in fees. Fees may be higher for specialty funds, but they are all coming down fast. If your company 401K uses high-fee funds, talk to the folks in charge. A difference of 25 bps in fees will mean a difference of about 5% in your portfolio value after 25 or 30 years.
9) and of course the most impactful -- never carry a balance on a credit card. If you can't resist, cut up the cards.
10) save, save, save!

June 23 2014 at 8:18 PM Report abuse rate up rate down Reply
Silence DoGood

An explanation of how to use the stock market as a means of saving. Good luck my friends.

January 06 2014 at 8:22 PM Report abuse rate up rate down Reply

Payday loans, raid your IRA? Scalp tickets? Any more BAD ADVICE Bruce? Ticket scalping is illegal in most locales, what is your next big money making idea Bruce, becoming a hit-man or arsonist for a little extra cash?
Go away.

February 06 2013 at 1:05 AM Report abuse rate up rate down Reply

never minded nicklin' and dimin' IT--was a great challenge and kept one on their toes and thinkin'.
and IT always worked--change added up.
now i cannot even do this anymore aaaaaaaaaand this IS quite disturbing.

February 05 2013 at 9:18 PM Report abuse rate up rate down Reply

26th way: never retire.

February 05 2013 at 7:05 PM Report abuse +1 rate up rate down Reply

The author neglected to mention selling one's sister.

February 05 2013 at 10:32 AM Report abuse +3 rate up rate down Reply

Why does the article say 25 ways to make extra money and there is only 9 ?

February 05 2013 at 7:55 AM Report abuse +7 rate up rate down Reply
1 reply to jwest000west's comment

well you see,it goes somethin' like this-
they get confused between huffpoop/aol news readership ,never thinking that anyone can bleeeeeeeedin THINK.
majority of those posting over here KNOW info and the truth.......unlike the braindead obummer_citizen corps.

February 05 2013 at 9:16 PM Report abuse rate up rate down Reply