Written by Katherine Morgan
An emergency fund is money you set aside for life's "uh oh" moments - like losing your job, your car breaking down, or a surprise medical bill.
Without an emergency fund, unexpected expenses force you to rack up credit card debt or drain your retirement savings. It's your financial safety net.
Start with $1,000 as a beginner goal. Then work toward 3-6 months of living expenses. If your monthly expenses are $2,500, aim for $7,500-$15,000. Have an unstable job or freelance? Go for 6-12 months.
Put it in a high-yield savings account that's easy to access but separate from your daily checking account. You want it available quickly, but not so easy that you're tempted to spend it on non-emergencies.
Automate it. Set up automatic transfers of $50-$200 per paycheck until you hit your goal. You won't miss what you don't see!
Ready to start saving? Use our Savings Goal Calculator to plan your emergency fund!