Pink ceramic piggy bank on a white backdrop. Emergency Funds and why you need one!

How To Build An Emergency Fund (And 5 Reasons To Do It Now)

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I’m not sure how I ever got by with having an emergency fund, because in recent years it’s come to my rescue quite a few times.

Unexpected emergency room trip with the kiddos (because who ever plans to go to the ER?!), sudden car troubles that needed immediate fixing, or that one time I accidentally broke the rear window of my car when I backed into a stupid camouflaged pole *FACEPALM*

If it hadn’t been for our emergency fund, we would’ve been driving our car around without a back window to this day.

Thankfully, instead of being caught off guard by these unexpected expenses, we were able to throw some emergency cash at them, no problem. Yes, some anxiety (if I’m honest), but overall it was smooth sailing.

It’s not if emergencies come in life, rather it’s just a matter of when.

Are you prepared for the random expenses life will eventually throw at you? If something unexpected happened today, would you have the money to cover the cost? If not, now is the time to get serious about building your own emergency fund.

Yellow Wells Fargo ATM machines. What is an emergency fund?
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What is an emergency fund?

An emergency fund is essentially just money put away in a separate savings account (or under your mattress) only to be used for life’s unexpected emergency circumstancesif and when they happen.

I’m not sure if you’ve ever had one of those days, week’s, month’s, or year’s, but sometimes things just go wrong. (As my mom always says, “If it’s not one thing it’s another.”) So, having an emergency savings helps you approach those seasons of life with confidence — cause you know your stashed cash has got you covered.

Building an Emergency Fund

Man in formal wear putting money in a ceramic piggy bank. Build an emergency fund and start saving now!
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Create a budget

While saving an emergency fund is important, you need to create a budget firstlearn how to save. This helps you understand how much money you’re bringing in, and how much is going toward expenses, so you can know how much you have to put away each month.

After you create a solid budget, develop a timeline to know when you can expect to have your emergency savings completed.

If you’re living paycheck to paycheck, save whatever you’re able to and then gradually as your debt decreases or your income increases, you can build your way up to your savings being fully funded.

Prioritize and save now

In order to successfully create and maintain your emergency savings, treat it like it’s a bill.

When your rent is due, you pay your rent. When your electricity bill is due, you pay the bill. Likewise, when you get paid, pay your savings fund, too. To make it easier on yourself, automate the transfer process of the monthly amount you’ve decided to add to your savings each month.

If you’re only able to save a small amount each month, don’t get discouraged, just save whatever you can now. Even if it’s pennies — those pennies will add up eventually.

Increase available funds

If after creating your budget you realize that you don’t have any way to allot money toward your savings, it’s time to consider ways to increase the funds available to you.


Whether you take on a side gig, or pursue passive income streams, search for practical ways to reduce your expenses and increase your income.

By cutting costs and increasing the money coming in you can streamline those extra dollars toward your emergency fund. Before you know it your emergency fund will be complete and you’ll be ready for whatever life throws your way.

Why Build an Emergency Savings?

U.S. dollar bill on a white surface. Why build an emergency savings?
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1. It Will Help You Get Out of Debt

I remember when I went out of state to go to college. I couldn’t work enough to cover my expenses due to the class load I was taking (22 units!).

My car had some issues, but there was no way I could pay it with my income. So, what did I do? I charged it. Suddenly my credit card debt went from nearly zero to quite the ugly number.

Has that happened to you before? You’re working on your debt, getting things in order, then BAM! You get side swiped by life’s circumstances. Next thing you know you’re back in debt all over again.

Having an emergency fund helps alleviate you of the life-sucking debt cycle you’ve been stuck in for years.

Always remember, once you use part or all of your emergency savings, work toward building it back up again. You want to do your best to maintain at least $1,000 saved, all the time.

2. It Gives You Peace of Mind

It’s a stressful thing to come upon desperate times unprepared. When you find yourself in that place, you’re left with nothing but terrible options to choose from.

Either you stiff one of your monthly bills and risk paying late fees (or getting the service shut off), or you go without enough food, or you can charge it.

Talk about added stress in already stressful circumstances.

When you build an emergency fund, you’re not left to make undesirable decisions. Instead, you have peace of mind knowing that when and if something were to happen, you’re prepared and as ready as you’ll ever be.

Boy hugging woman near a body of water. Having an emergency fund provides security for your family.
Photo by Xavier Mouton Photographie on Unsplash

3. It Provides Security For Your Family

When you have a family that you’re responsible for and life throws curve balls your way that you’re unprepared for, you can be left feeling quite insecure.

Having emergency cash in place, gives you a sense of security because you no whatever comes, your family will have what they need to get through it.

4. It Builds Financial Character in You

When you finally hit your mark, whether it be $1,000 or $10,000, you’ll feel such a deep sense of satisfaction. You actually did it!

You prove to yourself that you’re capable of being disciplined, self-controlled and resolute. That does something to one’s psyche, I’m telling you!

The very process of building your emergency fund and not spending it on non-emergency things builds financial character. Rather than being controlled by your money, you finally are seeing what it’s like to be the one in control.

5. It’s Simply Just Necessary

As much as we wish we could know what life was going to bring our way tomorrow, we don’t. Because we lack control, the best thing we can do is simply be prepared.

If we’re ever going to get out of debt, or be good stewards of the money we’ve been given, then we would be wise to build an emergency fund — it’s simply just necessary.

Common Questions

Turned on light bulb in the dark.
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How much do I put in my emergency savings fund?

Dave Ramsey’s emergency fund recommendation is to put at least $1,000 away for emergencies. If you’re able to afford more and you want more, then go for it!

At the end of the day having emergency cash is for your benefit. So, think about your life, your expenses, etc. and determine an amount that would suffice should an emergency arise. Then start saving toward that goal!

Where should emergency savings be stored?

Wherever you choose to store your emergency savings is ultimately up to you. You know yourself best, so determine a location (i.e. savings account) that’s easily accessible and practical for you.

The goal is to put your savings fund in its own location that’s easy to get to should an emergency occur. While you want it to be accessible, it shouldn’t be too easily accessible.


If you have trouble managing your money well, by keeping your emergency stash stowed away in a good spot, you reduce the risk of you breaking in and spending the money on non-emergency items.

What expenses can I use an emergency fund for?

An emergency fund isn’t meant to be used for any ol’ occasion — so no, you’re not technically supposed to use it to cover the cost of Timmy’s birthday party… that you didn’t save for.

Instead, emergency savings are meant to cover circumstances that are necessary, immediate, and unexpected.

Are you needing to receive a last-minute medical treatment for a health concern? Go for it. Did you lose your job and you need money to make rent and to simply survive? You’re good to go.

Expenses that aren’t necessary, immediate, or unexpected should be worked into your normal monthly budget, not taken from your emergency fund. So hold up, Gina! Those shoes you’re eyeing are not an approved emergency savings purchase.

Man walking and holding a leather briefcase. Emergency savings are necessary to be prepared for anything life throws your way.
Photo by Marten Bjork on Unsplash

Final Thoughts

Having an emergency fund is simply just smart.

It helps you get out of debt, it provides security when things go aloof, and it builds the financial character we all need to possess. Having an emergency savings comes with nothing but benefits — literally.

So, do yourself the favor and get cracking on your budget today so you can begin building your emergency stash right away. In the end, you’ll be so happy you did!

Happy Saving!

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