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6 Secrets to Building Your Emergency Savings

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When was the last time you had to max out your credit card or turn to a family member for financial support in an emergency? If you’re like 65% of Americans with little to no savings squirreled away for an unexpected car repair, trip to the vet, or rent if you happen to lose your job—being without a financial safety net can be scary.1

The sooner you start setting money aside to cover the unpredictable can mean greater financial stability and peace of mind over the long haul. While it can take time, the secret to getting there is much simpler than you think.

Secret #1: Set your emergency fund savings goal

How much money would you need to live if you suddenly lost your job? A common guideline offered by many investment professionals is to have a minimum of three to six months of total living expenses tucked away.2 For example, if you know you need $2,000 a month to cover the basics, like mortgage or rent, utilities, groceries, tuition, and transportation, you should plan to set aside anywhere from $6,000 – $12,000 into an emergency fund.

Keep in mind, your emergency fund savings goal may need to be larger, or smaller, depending on your personal family or employment situation. If you work in a seasonal or project-based industry where layoffs are the norm, or are the sole breadwinner of a large family, you may want to set aside more than if you live in a dual-income household with no children or other dependents.

Secret #2: Start small, be consistent

Seem daunting? It doesn’t have to be. It starts with changing the way you think about your saving and spending habits. No one ever ate an elephant in one big bite, right? It’s the same with building up your emergency funds. It’s all about your approach. Saving any sum of money begins by setting aside small amounts consistently and growing your savings gradually with regular contributions. It’s super simple and can be done with practice, patience and a little self-control.

How you do it is up to you and may mean making a few adjustments along the way. Here are some ideas to get you going:

  • Instead of spending $5 on your daily cappuccino, brew one at home and save up to $1,000 or more a year
  • Bring your lunch to work and curb weeknight dining out to say, once a month. Skipping that $10 lunch could add up to thousands back in your pocket in no time.
  • Shop around your cable, internet, auto insurance, etc., or ask current providers for better rates, discounts and promos.

Secret #3: Give yourself a savings deadline

“Someday” is a trap we all fall into sometimes. Just like someone who has a gym membership they never actually use, intention without action is pretty useless. So, set a specific timeframe for when you’ll achieve part or all of your total emergency savings goal.

For example, try setting a deadline for achieving half of your target savings goal for 12 months from today, or on an easy-to-remember milestone date, such as your birthday or New Year’s Day. Setting a specific date will not only kick-start you into action, it will give you time to figure out which savings strategy works best for you. If one technique doesn’t seem to be working, you’ve got time to find one that does.

Secret # 4: Break your savings goals into bite-size chunks

Here’s where we start to eat this elephant:

  • Save 10% of your total savings goal amount. Simply remove a zero from your total target savings amount and use that number as your first goalpost. So, if your emergency savings goal is $6,000, start with $600 and build from there.
  • Cut up your savings time horizon. If you want to have $600 saved a year from now, start by putting away $50 a month. It’s easier to save smaller amounts more frequently, rather than a huge amount all at once. (Remember, this is an elephant you’re consuming—it’s going to take time.)
  • Be realistic. Figuring out ways to save may feel slow or even uncomfortable at first. Taking the bus instead of driving to work every day to save on parking and gas or cutting back from dinner out every night to only once a month can take some getting used to. Stay persistent, but don’t expect change to happen quickly. Your momentum (and your confidence) will build once you see your emergency fund start to grow.

Secret #5: Make it difficult to spend your savings

As you start to see your emergency savings grow (yes, it will happen), you might be tempted to raid your stash. Dull this urge by having a plan that helps you stay in control.

Pro Tips:

  • Set up direct deposit from your paycheck or checking account into a local credit union that you don’t have an ATM card for.
  • To curb overspending, bring only a certain amount of cash to the grocery store. Leave your credit and ATM cards at home.
  • Name your emergency savings account so that when you log in, the name “emergency savings” reminds you not to dip into it.

Secret #6: Celebrate your wins, no matter how small

As time goes by, you’ll figure out which tactics make it easier for you to save. Mark your achievements with positive reinforcements that don’t create new expenses, like celebrating with a gourmet cup of coffee made at home or organizing a potluck dinner with friends. Soon enough you’ll be teaching them how to build an emergency nest egg just like yours.

Cheat sheet: Building your emergency fund

  1. Set a savings goal—3 to 6 months of living expenses is recommended
  2. Begin with small, regular contributions
  3. Set a timeframe for achieving your goal
  4. Break your larger savings goal into smaller, more digestible chunks
  5. Make it a little difficult to spend your savings
  6. Celebrate your wins with low- or no-cost rewards



Interested in learning more about saving? Check out these articles:

1. Bankrate’s Financial Security Index, Feb. 28 – March 4, 2018, https://www.bankrate.com/banking/savings/financial-security-0318
2. Bureau of Labor Statistics, https://www.bls.gov/news.release/empsit.t12.htm

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