Building an emergency fund with little income?

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!

Polished,

First, you know this is NOT going to last forever. And good for you for thinking carefully and far ahead.

Here are some ways you can save money and put the difference into your EF:

Decrease the hot water heater temperature by 5 degrees.
Increase the notches in the fridge and freezer by 1.
Walk when you can with the kids (to the post office, etc.).
USE COUPONS!
Turn your heat on 68 and wear sweaters.
Showers instead of baths.
Candles instead of lights (after the kids are asleep)
Are you getting the cheapest deal from your phone company? MCI has extremely competitive rates, and they give you a full months credit when you have a complaint.
When you clean out your fridge, make stew (sounds trashy, but that was the best stew I ever made).

Put your coins aside in a box or something. At the end of the month, take them to the bank and put them in your savings account.

I would suggest you get a job to help out the family. You can work when your DH is at home to watch the kids. That may mean that your work 2nd or 3rd shift for awhile, but so be it.

Congratulations. You are ahead of most Americans with believing that you need an emergy fund. 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 you're 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 and thanks for a great question.

get a credit card.

First of all, you may think about getting a job- even if it's just part-time. There's nothing wrong with being a SAHM, but sometimes you have to do what you have to do. When my ex and I were married, we had it worked so that he worked during the day-off by three- and then I worked evenings-usually like 4 to 10. It really helped because not only were we able to save money, but since we both worked differant shifts we didn't have to spend money on a babysitter. Good luck!!