How to Build and Use an Emergency Fund

How to Build and Use an Emergency Fund

Family carrying a Christmas tree along with their dog on a snowy hill.

Only 37 percent of Americans have enough cash in savings to cover an unexpected expense. (Think: Broken appliances, tire blowouts, high vet bill, etc.) The rest have to slash their budget or look to credit cards or family and friends.

An emergency fund can help prevent this urgent "crunch," and help keep you from dipping into your savings. Start building your fund with these simple tips:

  • Separate it from everyday spending. If your emergency dollars are in your checking account, you may accidentally spend them. Consider opening a savings account to make the money less accessible.
  • Automate the process. Set up an automatic monthly transfer between your checking and savings account, or ask payroll to direct-deposit a portion of your paycheck into a savings account.
  • Donate a set dollar amount each week. Every weekend, give your emergency fund $10—or whichever amount you choose. Just be consistent so you can see it grow over time.

Using Your Emergency Fund

Reserve your emergency fund for unexpected, absolutely necessary and urgent expenses—medical bills, car repairs or a new furnace in the middle of winter.¬†


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