How To Start Building Your Emergency Fund

There’s so much information out there on how much you should save for your emergency fund.

6 months of expenses, 3 months, etc.

I like to say don’t stress that & just get started!

You never know when you’ll have something unexpected come up like a medical bill, an unexpected house or car issue, or even worse – what millions of people all over the globe are experiencing right now with job loss due to the pandemic.

You don’t want to be in a position where you have to swipe a credit card and set yourself back further in your financial journey.

In my past experiences all of the big expenses always come at the worse time. Or there will be a bunch of unexpected expenses back to back.

How much money should you save?

If you don’t have a minimum of $1,000 in an account that’s off limits, start there.

Next, you need to find out how much all of your expenses are so you at least have a target goal to write down.

How many months you want to have saved will depend on your situation.

What if you have Debts?

Do you have $1000 saved but have high interest debts charging you over $100/month in interest?

If you’re unsure on how much per month your debt is charging you, please check out this for guidance.

My advise is to put the emergency funds on hold while you attack the high interest debts.

Once you’ve got those debts down to below $100/month of interest you can start attacking both.

I like to do a 50/50 split between emergency fund and debt pay-down.

I would either take half of my left-over income to apply to both, or alternate it.

For example – If you get paid 2 times a month the first checks “left over” will go towards emergency fund, the second checks would go towards debt.

I’m all for simultaneously reaching your goals. Once you start writing it down, speaking it true (affirmations!) the magic starts to happen.

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