Hi there! I’m Zara Maddison, and I’m 12 years old. I own a website called Assetsforkids where I help other kids learn about money.
Today, I want to teach you about something super important called an emergency fund. Think of it like a special piggy bank. You only open it when unexpected things happen that cost money.
This guide is different because it’s written by a kid for kids! I know exactly what it’s like to want that new video game or bike right now. But I’ve learned something amazing about emergency savings for kids.
Here’s the cool part: even tiny amounts of money can grow into huge amounts when you start saving young. It’s like planting a small seed that becomes a giant tree!
I’m going to share all my best young savers tips with you. You’ll learn how to save money fast and why having an emergency fund is even more important than saving for toys. Ready to become a money-saving superhero?
Why I Started My Emergency Fund at Age 12
When I was twelve, a family emergency made me see the need for saving money. It started on a Saturday morning when our washing machine flooded the laundry room.
I saw my parents standing in water, worried about repair costs. They whispered about whether we could afford a new machine. That’s when I realized unexpected expenses can happen to anyone, anytime.
I had $3.50 in my piggy bank. I thought, what if I needed money fast? What if my phone broke or I had to pay for a school trip?
That night, I couldn’t sleep. I felt helpless watching my parents worry about money. I learned that kids money saving isn’t just about toys or games. It’s about being ready for surprises.
The next week, our neighbor’s bike got stolen. My friend Sarah needed $50 for a science camp. Another classmate dropped his phone and cracked the screen. All these situations needed money that none of us had saved.
These stories made me understand something important. Emergencies don’t wait until you’re an adult. They can happen to anyone, no matter how old. The key is being ready for them.
I decided to start my emergency fund that day. I didn’t want to feel scared and helpless again. I wanted to be ready for any problem without panicking.
Looking back, starting my emergency fund at twelve was a smart choice. It showed me that age doesn’t matter when it comes to being financially prepared. If you can spend money, you can save for emergencies too.
Every dollar I saved made me feel more confident and secure. I wasn’t just saving money. I was building my financial future, one dollar at a time.
Setting Your First Emergency Fund Goal
How much money should I save? Adults say three to six months of expenses. That’s a lot for a beginner!
Learning about children financial planning helped me. You don’t need to save a lot at first. Start with what you can manage.
I found a simple way to figure it out. Think about your monthly needs. This includes school stuff and bus fare, not video games or candy.
If you get $10 a week, aim for $40 to $60. That’s one to one and a half months of savings. It’s a good start, even if it’s not a lot.
Maybe $40 or $60 feels too much. That’s okay! Some kids start with $25 or $50. Pick a number that makes you excited, not scared.
Here’s how to set your goal:
- Write down your weekly expenses on necessary things
- Multiply that by four for your monthly expenses
- Start with one month’s worth of expenses as your goal
- If it’s too much, cut it in half
- Write your goal down and keep it where you see it every day
Having a visual reminder helps. I wrote my goal on a sticky note for my mirror. Seeing it every morning kept me on track.
You can also use an allowance adventures chart to track your progress. It makes reaching your goal more fun.
Don’t worry if your first goal isn’t perfect. Mine was $30 because it felt doable. Reaching it made me want to set an even higher goal, $60.
Writing down your goal and setting a deadline is key. Instead of saying “I want to save money,” say “I will save $40 by the end of next month.” This makes it easier to stay motivated.
Young Savers Guide to Building Emergency Funds Quickly: My Step-by-Step Method
I made a simple five-step plan to help young savers quickly build emergency funds. This step-by-step saving method has helped me since I was twelve. I’m sure it can help you too.
These youth savings strategies are easy to follow. You don’t need fancy apps or hard math. Just stick to my method, and your emergency fund will grow fast.
- Pay Yourself First: Before buying fun stuff like candy, I save money for my emergency fund. This rule is the most important for me.
- Set Up Automatic Savings: I asked my parents to move money from my allowance to savings every week. This way, I always save and don’t spend it on other things.
- Follow My Windfall Rule: When I get unexpected money, like birthday cash, at least half goes to my emergency fund. Sometimes, I even save more!
- Use My Expense Tracking Trick: Every month, I write down what I spend for a week. This helps me find money I waste that could go to savings. You’ll be surprised at how much you spend on small things.
- Make Saving a Fun Game: I celebrate small wins and track my progress with a colorful chart. Every time I reach a milestone, like $50 or $100, I do a happy dance. It makes saving fun and keeps me going when it gets hard.
This method has helped me build my emergency fund faster than any other. The secret is to start with one step and add more as you get used to it.
Easy Ways to Earn Money for Your Emergency Fund
I found cool ways to grow my emergency fund. It’s awesome to see your savings grow fast. When I started saving extra, it felt like magic!
Let’s look at ways to earn money by age. What works for a 7-year-old is different from a 13-year-old.
For younger kids (ages 7-10):
- Ask for extra chores around the house with small payments
- Sell toys and games you don’t use anymore
- Help neighbors with simple tasks like watering plants
- Collect and return recyclable bottles and cans
- Make friendship bracelets or simple crafts to sell
My little cousin made bookmarks and sold them for 50 cents each. She earned $15 in one month from family!
For older kids (ages 11-14):
- Pet sitting for neighbors when they’re away
- Lawn work like raking leaves or pulling weeds
- Tutoring younger kids in subjects you’re good at
- Selling homemade baked goods or lemonade
- Car washing services for family friends
Remember, the money goes straight to your emergency fund. No spending it on video games or candy. It’s for a good reason.
Always ask your parents before starting a money-making activity. They keep you safe and have great ideas. Plus, they’re often your first customers!
Earning money for your emergency fund makes you feel grown-up. When you tell adults you’re saving, they’re impressed. It shows young people can handle money well.
Start with one or two activities that sound fun. Don’t try too much at once. I started with extra chores and selling old books, and it worked great.
Keep track of every dollar you earn. Add it to your emergency fund total. Seeing those numbers grow is amazing. You’ll be surprised how fast your emergency fund grows when you actively earn money for it.
Money-Saving Hacks That Actually Work
I’ve tried many money saving hacks for kids over the years. I’m excited to share the ones that really work. These tips are easy to follow and help me save money every day.
My favorite trick is the 24-hour rule. If I want to buy something over $5, I wait a day. Often, I forget about it! This trick has saved me a lot of money.
I also love comparing prices before buying. I check different places to find the best deal. It’s like a fun game that saves me money.
Before buying something new, I try to make it myself. This approach has taught me new skills and saved money. It’s a great way to be creative and frugal.
Every few months, I review my subscriptions. I cancel anything I don’t use often. This frees up money for my emergency fund.
Understanding opportunity cost has changed my spending habits. These kids budgeting tips help me make smarter choices. I spend less on fun things and save more.
I use a special envelope method for my money. I have separate sections for savings, spending, and gifts. It helps me stay on track with my goals.
My free fun challenge has been a big help. I look for free activities instead of spending money. This way, I save more money for my emergency fund.
These simple strategies have helped me save a lot of money. You can start using them today, all by yourself.
The Best Places to Store Your Emergency Money
Finding the right spot for your emergency fund is key. You need a place that’s safe, easy to get to, and not mixed with your daily money. Here are the top spots I’ve found.
Starting with a savings account at your local bank is a good idea. Your parents can help you set it up. It’s safer than hiding cash under your bed. Plus, you’ll earn interest, making your money grow.
Don’t forget to check out high-yield savings accounts. Some banks offer more interest than others. This extra interest might seem small now, but it adds up over time.
Make sure your emergency money is all its own. I learned this the hard way when I spent some of my emergency fund on a game. Now, I use different accounts or banks to keep it safe from temptation.
Don’t put your emergency money in risky things like stocks. Stocks might grow fast, but they can also lose value quickly. You need your emergency cash right away, not when the stock market decides.
I sort my money into different “buckets” to stay organized:
- Emergency fund bucket (untouchable except for real emergencies)
- Fun savings bucket (for toys, games, or special purchases)
- Spending money bucket (for everyday stuff)
- Long-term savings bucket (for bigger future goals)
Getting your parents to help pick the right account is important. They can help compare banks, understand rules, and make sure you can get your money fast in an emergency.
Some families use RRSPs and TFSAs for long-term savings because of tax benefits. But, your emergency fund should be easy to get to, not locked away for years.
The goal is to find a balance between safety and growth. Your emergency money should be boring – sitting safely in an account ready when you need it. Save exciting investments for money you won’t need right away.
Staying Excited About Saving When It Gets Tough
The hardest part of building my emergency fund was staying excited. I had to earn the money, but keeping the excitement was tough. There were times I wanted to stop saving.
I stared at my piggy bank when I was 13. I wanted a cool video game my friends had. My savings could buy it, but kids savings motivation was hard to keep up.
I found ways to stay motivated. These tricks helped me when saving felt boring or pointless.
My favorite trick was a visual progress chart. I drew a thermometer on poster board. As my savings grew, I colored it in red. Seeing my progress made saving fun.
I also celebrated small wins. Every milestone was a reason to treat myself. Maybe a movie night or snacks. These celebrations kept me excited for the next goal.
Finding an accountability buddy was key. My brother started saving too. We checked in every week. Having someone else on the journey made young savers persistence easier.
Here’s a secret: saving slumps are normal. These are times when saving feels hard or pointless. I went through many of these phases, feeling like I was failing.
In my worst slump, I spent some money on candy and felt bad. But I learned to start small again. Saving just 50 cents a week helped me regain momentum.
When saving is hard, I remember why I started. I think about the freedom of handling emergencies without help. That freedom is worth more than any toy or treat.
Remember, every dollar saved is an achievement. It doesn’t matter how much you save. Every bit of progress is good.
Some weeks you’ll save more, some less, and some nothing. That’s okay. The key is never to give up. Your future self will thank you for every effort, no matter how small.
Your Journey to Financial Success Starts Now
I’m so excited for you to start this amazing adventure! Building your first emergency fund is a great gift for your future self. You have something special – time. Saving early lets your money grow more through compound interest.
Imagine saving $50, then $100, and maybe even $500 or more. Every dollar you save makes you stronger and more confident. You’re already smarter about money than many grown-ups who don’t save!
Here’s your simple plan to start right away. First, choose a savings goal – maybe $25 or $50 to begin. Next, ask your parents to help open a savings account. Then, save your first dollar this week. It can be from birthday money, allowance, or coins you found.
Financial success for kids starts with small steps like these. Young money management gets easier when it’s a habit. I’m on this journey too, learning new ways to save every day.
Share your progress with friends and family. You might inspire other kids to start saving! Remember, every financial expert started somewhere. Building your emergency fund teaches you responsibility and sets you up for an amazing future. Your journey begins right now – take that first step today!
FAQ
What exactly is an emergency fund and why do I need one as a kid?
An emergency fund is like a special piggy bank. It helps with unexpected costs. This could be when your phone breaks or you need money for a school trip.
Having money saved means you won’t stress or ask your parents for help. It’s your financial safety net!
How much money should I try to save in my emergency fund?
Start with a goal that feels right for you. If you get a week, aim to save -60. That’s about 1-1.5 months of your allowance.
If that’s too much, start with or . Pick a number that’s challenging but doable. You can always increase it later!
What’s the “pay yourself first” rule you mentioned?
This means saving emergency fund money first. Even before buying candy or new apps. As soon as you get money, put some aside for savings.
This way, you’re not tempted to spend it. Your emergency fund grows automatically.
What kind of jobs can kids my age do to earn extra money?
There are many jobs for kids like us. Younger kids can do extra chores or sell old toys. Older kids can pet sit, do lawn work, or tutor younger kids.
Always ask your parents first. And remember, extra money goes to your emergency fund!
Where should I keep my emergency fund money?
I keep mine in a savings account at a bank. It’s safer than cash at home and earns interest. You can get to it quickly if needed.
Keep it separate from your spending money. This way, you won’t be tempted to use it for non-emergencies.
What’s the 24-hour rule for spending?
Wait 24 hours before buying anything over . Often, I change my mind. This trick has saved me a lot of money for my emergency fund.
How do I stay motivated when saving gets boring?
I use visual progress charts and celebrate small wins. I also have an accountability buddy. Remind yourself how good it feels to handle emergencies without stress.
Every dollar saved is an achievement!
Is 12 years old too young to start an emergency fund?
Absolutely not! I started at 12 and wish I’d started earlier. We have time for our money to grow. Starting young puts you ahead of many adults.
You’re never too young to be smart about money!
What counts as a real emergency for using this money?
Real emergencies are things you really need, not just want. Examples include a broken phone, urgent school expenses, or medical costs.
Wanting the latest video game or sneakers doesn’t count as an emergency!
How can I involve my parents in building my emergency fund?
Ask your parents to help with automatic transfers and opening a savings account. They can also support your money-earning activities. Most parents are excited when their kids learn about money.
They can help you stay on track and celebrate your progress!