Life can be unpredictable and bring unexpected expenses, so financial planning for an emergency fund is something you should think about. There are plenty of ways to save money to create an emergency fund, and one of those ways is to use passive income. This is money you can generate without active engagement, such as cash from savings accounts, dividend stocks, and bonds.

Throughout this article from Fast Payday Loans, Inc., we provide five ways to establish a crisis fund with passive income, helping you live freely and reach your money goals. We also show you how you can use an online payday loan to handle financial emergencies if you do not have enough money in your emergency fund yet.

What Are Five Ways To Build An Emergency Fund With Passive Income?

Part of today’s financial reality, with escalating inflation rates and higher cost of living, is that the money you make from your job may not be enough to save. This is especially true if you want an emergency fund to help pay for urgent bills.

Instead of worrying about saving a couple of dollars from your paycheck, you can use passive income to build up a crisis fund for a financial emergency. The following are some passive income revenue streams that can help you build an emergency fund:

1. High-Yield Savings Accounts

A high-yield online savings account is an ideal way to grow passively grow an emergency pot. This type of bank account can pay up to 5% in interest, much higher than traditional savings accounts. The interest you receive on the money you actively put into the account is added to your balance. 

This type of savings account is federally insured, so you benefit from a higher interest rate than the national average. Your provider dictates the percentage, and they can change it whenever they see fit (depending on the contract). Always shop around because small changes can make big differences in the interest you accrue long-term, allowing for a more sizable crisis fund.

2. Dividend Stocks

You can invest in exchange-traded funds or index funds that hold dividend stocks. This means you don't have to go through the potentially risky hassle of picking and choosing individual stocks to purchase. If you want a more hands-off approach to investing, this is the option for you.

Index funds offer a diverse selection of stocks, aiming to mirror the performance of certain indexes, like the S&P 500. The dividend ETF/index fund invests in a range of stocks that offer dividends, helping balance portfolio risks since market swings are usually less volatile across an index.

Dividend ETFs, on the other hand, offer the diversification benefits of index funds while also providing the trading ease of stocks. To invest in these or index funds, you will need to create a brokerage account. Taking advantage of these stocks allows you to accrue passive income on top of your salary, giving you options for investing in an emergency fund for unexpected expenses.

3. Crypto Staking

Crypto staking is a method of growing your holdings in specific cryptocurrencies by using them to verify activity on the blockchain network. Once you stake a cryptocurrency, you're rewarded with more. 

Generally speaking, staking involves delegating crypto to somebody compiling transaction records on the relevant network. Said verifiers must put some tokens at stake to guard against fraudulent activity. Offering the voting power of your tokens to reputable verifiers allows you to share in the rewards.

4. Bonds And Bond Funds

Bonds allow you to lend money to companies or governments and earn interest income. They're generally considered safer than stocks but offer a lower return on your investment. Thanks to their lower volatility, experts typically recommend investing a portion of your portfolio in bonds.

They're a valuable financial planning tool if you're looking for a relatively easy way to grow an emergency fund. This money can accrue without significant involvement, and you can invest the passive income into a crisis fund to pay for a financial emergency, such as late bills, auto repairs, and medical bills.

5. Certificate Of Deposit

A certificate of deposit (or CD) is a savings account used for a predefined duration. For instance, you could put funds into a three-year CD and receive a fixed interest rate for that period. 

You can expect higher interest rates than savings accounts since you're forced to lock your money away for a certain period. You're compensated royally for your commitment to saving.

What Should You Do When Unexpected Expenses Cost More Than You're Emergency Fund?

Sadly, life won't wait to throw you curve balls. Unexpected expenses can arise whether you have enough cash in your emergency fund or not. If this happens to you, it's important to know where to turn for urgent financing. 

Beyond asking family and friends or trying to get a personal loan from a traditional bank, you can contact us at Fast Payday Loans, Inc. for a payday loan. As our name suggests, we offer payday loans to people looking for emergency funding like you. To get a payday loan from us, you will need the following required items:

• Government-issued identification (i.e., driver's license, student ID card, military service member's ID card, or passport)
• Most recent pay stub
• Blank check from your active checking account in your name

Unlike traditional loans, you do not need a good credit score to get a payday loan. We use other factors to determine your affordability, ensuring our loans are available to individuals from all walks of life. The quick approval process lets you see if you qualify for the payday loan, which can pay you up to $1,000 the same or the next business day.

Get A Payday Loan From Fast Payday Loans, Inc. Today!

Building an emergency fund with passive income is rewarding and incredibly useful. It frees up income you earn from your regular job, allowing you to reach your monetary goals quicker than you otherwise would. 

However, if life hits you with an expensive, unexpected expense that you don't have enough to cover, you can get a payday loan from us at Fast Payday Loans, Inc. right now. Simply fill out our simple online request form, and we'll give you a call to guide you through the approval process.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.