Building an emergency fund with little income

[skinnybudget]

Sorry if this has been discussed before but I've been trying to get our finances in order (better late than never right?) and I know I need an emergency fund but right now we are barely making ends meet. I have a budget, but we squeak by every month. We now have $60 in savings that I've scraped together.

DH is a grad student and his future prospects are at about $40-50K, hopefully he'll be employed this coming fall. I am a SAHM. We have no payments beyond rent, electric, phone right now, although I do make very small interest payments on my deferred student loans ($5 every couple months). We REALLY need an emergency fund, start saving for retirement, would like to buy a house (someday??) and our car is 9 years old with almost 150K miles on it - and very testy. Where do I start? Should I just try to keep scraping a few dollars here and there together until DH starts working? Or should we take out one last student loan (unsubsidized $5K) to use as an EF? Or something else? I'm very concerned right now because the check engine light came on in our car today!

TIA!

[PRICEPLUS]

Scrape togehter that EF. It helps mentally as well!

[LuxLiving]

Can you post your income and expenses in more
detail and perhaps we can help pinpoint some areas
you're 'leaking' more than you need to?

My first advice is to just say no to the student loan if you can. It might
have to be an option, but don't jump at it w/o very careful consideration.

Let's hear more about your situation first.

[Broken Arrow]

$60 is a wonderful start! When I was I starting out, I only put away $20. It was all I could afford at the time. Yeah... money was that tight back then. But after that, I kept adding $20 to it with each paycheck. Oh yes, I remember screaming wildly, celebrating as a hundredaire.

Anything you can put away will give you that much more of a piece of mind, and as it slowly grows, the larger it is, the more it can protect you from financial setbacks. But I think the most important thing is to get into the habit of doing it, and keeping at it.

[poundwise]

Don't forget about other options for coming up with funds:

1) Sell some things
2) Get a second/part-time/night job - even temporary
3) Cut back some things (get groceries on the cheap, turn off cable, etc.)

Most people have more to work with than they think because they are used to working with what they have left, not what they start with.

Best wishes.

[Ima saver]

Put something away every pay day, even if it is only $5. I advised a girlfriend of that and she said $5 was not enough to worry with. That was 30 years ago, she would have now put away $7800. With interest that money would now be worth about $25,000.
I do not advise a loan.

[tinapbeana]

i agree, some extra information about your household's income and outflow would help folks to, well, help

with that said, the easiest and way i know to save when you feel you can't save anything is to pay cash and save the change you get. it's just about painless, and can easily add up to 10-20 per month. if you're feeling ambitious, try saving your dollar bills, too. i save ones and change from my personal allowance and find i stash 20-30% without really feeling it.

another other option: when you're writing a check (say $42.23 for groceries) round up to the next dollar and enter than into your register ($43). at the end of the month, take your 'change' from checking and put it into savings.

poundwise's suggestion at looking at a part-time job is a good one, especially if you can get it at a store where you already shop (they might offer an employee discount). or, as a SAHM, you could consider babysitting or running errands for friends/family/folks in the neighborhood.

[skinnybudget]

I'm always trying to figure out how to cut down on our expenses so if anyone has any suggestions that would be great!

Expenses: 1200
Rent 675
Electric 65
Phone 20
Food 300
Gas/Maint 80
Car Ins 20
Household 40

Income: 1200

We live in grad housing and rent includes heat and ethernet. We do have a membership to the YMCA that is 24/mth included in household exp. I try to turn off lights and unplug electronics when not in use and I try to limit driving, but I do drive to the store and playdates. We also go to my parents' about 2 hrs away once a month or so. DH bikes. For entertainment we use the library, go to the Y, and do other outdoor activities-weather permitting. I think I could maybe cut down some on food? We thought about getting rid of the car but I think it would be too depressing!

I know what we need is more income but I haven't found anything yet that would not require at least a little child care and not require me to stand the whole time (one bad knee). DH could look for a weekend job but to be honest I think it would be a strain on our family life. He works on his school stuff pretty much whenever he's not working and it's a huge priority to us for him to graduate, hopefully in May! He already has a lot of student loans from undergrad/grad so I don't like to take out more but I thought that it was an option.

Thanks for all the help, any advice would be great!

[tinapbeana]

well, 2 things. rent is probably what actually 'needs' to be reduced as it is currently over 50% of income. chances are that's not going to be considered a viable option, so i would agree food is probably the next likely target. there's lots of good advice on here regarding cooking and eating on a budget.

and yes, extra income would definitely make things pinch a little less. are there other grad students in your complex with kids? could you baby-sit for some of them? a friend of mine works in a day-care and gets to bring her son along, perhaps that would be an option.

[creditcardfree]

It appears that your food budget may be the only place to cut right now. Cut down or out soda. Eat some more meatless meals each week. Eggs are inexpensive meal. Cut coupons, watch the grocery ads. Cut out convenience foods if possible. Even if you cut the budget by $25/mo you are getting ahead with your emergency fund.

Sell things on ebay. Save any gift money. Save your change. Save any tax refund. Cash in soda cans. Have a garage sale. Find paid surveys online. Babysitting for neighbors...put out flyers in your apartment or the grocery store. Other services that other grad students might pay a fee for...editing, laundry, cleaning apartments. Best of luck.

[LuxLiving]

I agree food is your main area you can make a difference in w/the income you're already bringing in.

Try:
http://www.menus4moms.com/frugal/mea...rd_times_1.php

and
http://www.hillbillyhousewife.com

If this is too austere for you try cycling on and off it every week to 2 weeks and see if you can't put back the savings for your Emergency Fund.

With that bad knee you might try the paper-route idea. Also in our state we have a vocational-rehabilitation program that will help send you to school so you can get training for a job that will allow you to stay off whatever injured or disabled body part you've got. You might want to look into something like that if you're wanting to go to school yourself.

[tinapbeana]

Originally Posted by creditcardfree

Other services that other grad students might pay a fee for...editing, laundry, cleaning apartments.

love this suggestion! think about things that, if money were no object, you'd want people to do for your family. these might just be the same things you could do for the grad students in your complex. running errands, grocery shopping, photocopies, trips to the library, giftwrapping, child-care, taking cars to mechanics, etc. an all-around gopher service, if you will. you could pick and chose tasks that would allow your child to be with you and wouldn't irritate your knee.

[mom-from-missouri]

How many are you feeding on your food budget? I may have missed how many children you have.
Maybe you can bring in some extra money by babysitting in your home? Even $25 a month could make a difference here. Being a college student, you could probably advertise on a school classified website for free, and watch for boards in various buildings you could put a note on. Advertise you will sit on weekends or evenings, when couples may want to go out. Tell other parents that you are looking for something part time at home, childcare, typing and ask them to spread the word. Other things come to mind as translation services, teaching a skill (In the past I taught a cooking class for children, and beginning sewing for little girls at our local rec center-part of my payment was my kids could go into the playroom during that time. Each class paid me $25. Maybe your local Y has such as program or contact your library-they may be interested in doing this with you being a 'contractor' for them. Does your library or the school library have a program for little kids?

[PrincessPerky]

as to the car, try pretending to ditch it every other month...try asking more of the playdates to come to you, or walk to them, dunno the age of your kid, but you would be amazed arhow far a kid can walk when well fed and rested.

Try asking your parents to drive the 2 hours, if they still drive, try every other month, or once a season. If you need an excuse have your kid 'decorate' in some way and ask them to come see it.

[Daylily]

It's great for you to want an emergency fund. At the same time, don't beat yourself up. With DH as a full time student, of course things will be tight financially. I spent eight years of my life as a full time student and more as a part time student. The key is when DH does get that job, don't go overboard. Remember that you can live frugally, use the excess from DH's future job to fund retirement, downpayment, EF. In the meantime good luck with saving and remember that this is only a temporary situation.

[disneysteve]

I think the only answer is more income, even if it puts a strain on the family time for now. You're total income right now is only $14,400/year. There just isn't much left to cut when that's all that's coming in.

Being a SAHM isn't realistic under those circumstances. I agree with others about either looking for something you can do from home, finding a job where you can bring your child, or finding fellow students/wives who might be able to watch your child while you work.

When I was in med school, I typed for the class note service. Back then (1986-1988), I earned $2/page and typed a few thousand pages over the 2 year period. If you have a computer and a printer, you can do that (assuming you can type). And I had plenty of med student and other grad student friends who worked while in school. It was the only way they could afford to live. It wasn't fun, but it needed to be done.

[LivingAlmostLarge]

I would take in another child. I'm also a graduate student and I know grad students whose wives want to stay at home. But on that income it's impossible. So any what they do is take in other people's kids (other grad students, post-docs, profs) and watch 1-2 other kids at $400-$500/month. Makes a huge difference, even just one child.

Think about it.

[vishenda]

The standard amount you should have is 3 months of income set aside for 'emergency'. This money is not to be used unless you get laid of from work (it happens) or have a true emergency. You laid a good framework for your current situation but if you want a more detailed assesment, include your total income, bills, and interest rate on your loans.
If your phone/cable bill is something you can do without (or just lessen for a few months) you may want to consider doing that and applying that money towards your Emergency Fund.
If your student loan is about 3% or so, I would continue to make the minimum payments on it. The 3% wouldn't be worth making extra payments on when your priority is your emergency fund.
I would NOT recommend taking out another loan to have just in case. If it comes to a true emergency and you need money, try to borrow from friends or family. Usually, they are kind enough to not charge you interest. Going in debt is something you want to avoid at this stage in your life with limited income.

And if you are worried about your 'check engine' light. See if you can have a friend to look at it and pay them in beer for their services. It always worked for me!

Best of luck to you

[LuxLiving]

here is a thread on earning extra income that might jog an idea:

How do you earn extra money?

[Snoopy2645]

Could you demo I did this while dh was in school it worked well for us. You could also do merchandising if possible? Also surveys & stuff online. Or get into rebates I put all those I get back in checks into the kids savings accounts you could it for the EF or what about a tax refund when I was single mom thats what I did every year with my tax returns put it into savings for EF