How much do you have saved for an emergency? If you have little money saved, you aren’t alone. Almost half of Americans don’t have even $1,000 saved for an emergency. They’d use a credit card, borrow from a family member or friend, or be unable to pay for the emergency.

None of those situations sound ideal, right? We all need an emergency fund now more than ever, as we face the pandemic and its aftermath. If you don’t have an emergency fund started, take these simple steps.


Ideally, your savings account should have 3 to 6 months of your monthly expenses saved. If that’s too much to think about, try saving 10% of your annual salary. If you make $50,000, have at least $5,000 saved by the end of the year.

Either way, that may seem like a lofty and overwhelming goal. Don’t stress yourself out using such a large goal. Instead, focus on a smaller figure. Start with $500 – $1,000. How long would it take you to save that much?

Work the number into your budget. Make it a non-negotiable. If you can, automate the savings, setting it up with your employer’s
direct deposit or right from your checking account to your savings account. Either way, taking the work out ensures you save the money.

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Once you meet that savings goal, ramp up your budget. You have $500 or $1,000, now it’s time to achieve the 3 to 6 months of expenses or 10% of your income goal, whichever makes you feel better. Work those numbers into your budget. If it seems impossible, look at where you can cut down your expenses.

Think of the following:

  • Can you cut the cord? You may save $100 or more per month.
  • Do you have memberships you can cancel?
  • Do you have spending habits you can change, such as coffee stop shops, shopping sprees, or online spending sprees?
  • Can you shop around for insurance?
  • Can you negotiate your credit card interest rates?

These small changes add to the amount you can put in your savings account. Don’t spend the money, just reallocate the money budgeted for those expenses to your savings account.


It may seem frustrating to put that money away for a rainy day, but when that rainy day comes, you’ll be glad you have it.

Whether unemployment rates shoot up again, your car breaks down, or your furnace breaks, you will have the money to cover the expenses and not create panic throughout the house. While emergencies aren’t pleasant, they may be easier to manage when you have the funds available.

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If you haven’t started an emergency fund, start today. Open an account that’s separate from your spending account. Make it an account that’s hard to access, but easy to transfer money to (online is the easiest). Make saving automatic and you’ll take the thinking out of creating your emergency fund.

Let the funds grow and sit until you need them for a true emergency.
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