How to Best Start An Emergency Fund in 2018 Living Pay Cheque to Pay Cheque

Many Canadians are living pay cheque to pay cheque. It is a plain fact. If this is you, please know you are not alone. I’ve been there done that. If one of your New Year’s resolutions is to start saving a bit of money in 2018, let us start with the best way to start an emergency fund in 2018 even when you are living pay cheque to pay cheque. Yes, it can be done.

The Reality Check

First up, before you can move forward, we have to look at our past. We have to look at our current and past habits. Can I challenge you to look at your budget if you have one? If you don’t have one you want one, stat! For me, the best way to do this was to track my spending. Write down every penny you are spending as a family. This may seem daunting at first but by carrying a small notebook with me, I was able to track my spending. You can do it too!

The Road Map

If you don’t already have a budget in place, this is where you start. Look at what you have been spending. Look at your priorities. I was surprised at how much I spent in certain areas in mindless ways. Every penny does matter when you are living pay cheque to pay cheque. Set your priorities, if savings is a priority that you really want go for it! Find areas you can cut or do less. Starting small is ok. Even $10 a week makes a difference over time.

If you need help on how to set a budget here are a couple of posts from friends of mine that helped me:

  1. 7 Steps to a Budget Made Easy

2. Gail’s Guide to Starting a Budget

Quick Start Your Savings

I know as I look around my home there are several things I am not using. Right now, there is that bread maker I got last Christmas and used twice, there is the old camera collection that is gathering dust, and the pile of books I have read. Take a look around your house, what if you sold these and started your nest egg, your emergency fund with the proceeds? Most of us have a few things we can sell for a profit. I use Kijiji when I have things to sell.  By selling even $200 in goods it gives you a starting balance.

Add to Your Income

For those of us who are parents, it can seem hard to find the time to add to our income. It isn’t always easy for anyone. You can freelance your skills if you have one. I know several friends who supplement their income writing for blogs and brands. I know some younger girls who babysit. Others I know dog walk. What could you do for a few hours each week to supplement your income? Can you ask for more hours at work? Use this income minus transportation costs to go straight into your emergency fund.

By taking these actions, I was able to start my own savings account when I was living on less than $26,000 a year in Toronto. It can be done. When there is a will there is a way. Let me know what are you doing to ensure you have an emergency fund?




How Far From the Brink are You?

An emergency department sign.

I was reading the newspaper with my tea this morning, yes, I am old fashion like that when I came across an IPOS Reid survey that scares me. For as long as I have had this blog I have shared my story of debt and how hard it is to rebuild after debt destroys your life. It’s hard, it takes work, it takes time. One simple emergency and things change.

A new poll stated that many Canadians are less than a paycheque away from being able to pay their bills in fact many where already there. That should scare you. I know it scares me. Many are on the road to bankruptcy. They see bankruptcy as an option. Bankruptcy doesn’t change habits. It doesn’t change mindsets. Emergencies happen, they are a part of life. I have lived through divorce, fire, flood and hurricane.

I know of more than one who declared bankruptcy only to have to declare it again within years. Why are we allowing ourselves to live so close to the brink? Many Canadians live with no savings and live paycheque to paycheque. I was one for many years. It’s a scary place to be. You have no safety net. You are not prepared for any emergency.

As a nation, we are a nation of debtors. Us Canadians carry the highest debt load in the G7.  We believe because of the low interest rates we can afford more, need more. We no longer save for what we want, we go and buy it and then worry about the payments. We buy furniture, clothes, travel, cars, education all on credit. What does it all this credit do to us. It makes us slaves to those we owe.

Have you ever stopped before you bought on credit? before you took that deserved trip? bought that pair of shoes? took that night out? They all have ramifications if you don’t have the money in the bank.

Getting out from under your debt load takes hard work. It takes taking a step back and seeing how close to the brink you really are. It takes realizing you made a mess and being willing to clean it up. It means being willing to do the work. It may mean some major life changes. I know for me it did.

If you are in consumer debt, figure a way out, stop spending your tomorrow. I know for me it meant being real about my debt, it meant hard conversations, it meant making choices and realizing I really did want a better tomorrow and I would make sacrifices today. Do you know how close to the brink you are?

Things like seeking a professionals help are ok, so is building a nest egg of savings to keep you away from the brink. Build an emergency fund. Start with a $1000 in the bank that is there for emergencies, and build from there. How do you get that first $1,000. Most who have huge consumer debt loads, have stuff. Sell some of it or get a part time job or create a secondary flow of income. Do the hard stuff to get where you want.

Trust me it takes time and energy to move away from the brink but it is worth it for the peace that comes.

#CommonCents Ways to Save: Day 5- How to Build an Emergency Fund


Having had to live pay to pay is not easy! For many who do this, it seems daunting to even think about building an emergency fund. I know for many years I thought it was impossible. Coming from the mindset I have just enough to make it to the next pay I know how overwhelming it can be when you first want to start saving for that rainy day. I was so glad a few years back I had started an emergency fund.

I needed that fund when on January 2nd 2012, I found myself laid off from a job I loved. I have not been employed since. I have been freelance ever since. I was very thankful that I had my small emergency fund ( I had at the time 90 days saved), which I stretched with IE to last 9 months as I looked for a traditional job and switched to a freelance mindset. I have been living off my community management contracts and blogging opportunities ever since.

I know how important an emergency fund is as you can lose a contract at any time, so how does one build an emergency fund with limited funds? I recommend that you have at least 6 months of living expenses saved ( that means money for basic living expenses).


Do you have a monthly budget? Many times on this blog I have mentioned how important that is. Do you need help to get you started? My friend Kerry from Squawkfox has some great worksheets on her blog to get you going. It’s critical to know how much you have coming in and going out every month.

Lower Expenses Where You Can

Take a look at where you are spending every month. We cut out cable and I looked for free ways to watch my favorite tv shows. I also walked more and cut my transportation costs. Remember you can even do simple things to lower your bills like hanging your laundry out to dry.

Automate Bill Payment

How many times have you been a day or two late and had to pay a late fee? I know I have. It sucked. Automate bill payments that are fixed amounts like insurance, internet, etc. I know it has helped me to be more organized. For other non fixed bills I have an in and out box and twice a month these bills get paid.

Eat In

How many times a month do you go out for lunch at work? grab take out on the way home? or go out for dinner? Even if it is fast food you are spending too much outside the house. By cooking simply healthy easy meals at home and packing your lunch you can save big.

Cut Your Grocery Bill

This is one of the easiest places to impact your families budget. By using coupons and tech to price match I can easily save  at least 30% each week. I also shop smart and make one trip to the grocery store each week.

Earn More

Look for ways you can earn more money. There are many ways you can earn more, from possibly babysitting, to having a yard sale or taking on a part time job. For those of you who are bloggers you might want to pitch companies instead of waiting for offers to come to you. Several of my friends sell things through MLM’s as well as have there full time jobs. Think of something you can offer.

Separate Your Savings From Your Cash Flow

Once you start savings you want the money going into a separate account. You want to have the money you are saving to be working for you as well, so I suggest the highest earning savings account you can find.

For Canadians, I suggest putting into a high interest TFSA. Right now at Tangerine, till March 31st, open an account and you can 2.5%. This lowers to 1.08% after that. Take a look around and see what will work best for you.

By separating your savings from your cash flow you are more prone to actually save it for when you need it, instead of grabbing a $20 here and there from it.

Over time, an emergency fund can be built, and it is all done by taking that first step. Have you started yours?