How to build your own emergency fund

by Debbie Blum 04/14/2024

Building an emergency fund is a crucial step in establishing financial security for your household. Like it or not, we all encounter unexpected expenses, whether they be from an appliance breaking or major lifestyle changes. Here are some tips to help you get started and build an emergency fund:


Set a savings goal

Determine how much money you would like to save for your emergency fund. It is generally recommended to aim for three to six months' worth of living expenses. This will provide a cushion to handle unexpected financial emergencies.


Make it automatic

Set up an automatic transfer from your checking account to a separate savings account for your emergency fund. Automating the process ensures that the money is consistently saved without relying on willpower alone.


Start small & and be consistent

If saving a large sum seems overwhelming, start with small contributions and gradually increase them over time. Consistency is key. Even saving a small amount regularly can add up over time.


Save windfalls & extra income

Whenever you receive unexpected income, such as a tax refund, a bonus, or a gift, consider putting a portion or all of it into your emergency fund. It's a great way to boost your savings without impacting your regular budget.


Keep it separate

Maintain your emergency fund in a separate savings account, preferably one that is not easily accessible for day-to-day spending. Keeping it separate will reduce the temptation to dip into the funds for non-emergency purposes.


Remember, building an emergency fund takes time and discipline. Stay committed to your savings goals, be patient, and celebrate each milestone along the way.


About the Author
Author

Debbie Blum

Real Estate sales are complex, stressful & unpredictable but I can’t imagine doing anything else! It’s the people, I am drawn to and motivated by them. I love working with clients to plant roots in a community or leap into the next stage of their lives. When done right, it empowers homeowners & buyers to make investments in their future. I'm honored to be a guide and adviser for those I have helped. I'm humbled to offer the same to you!