Emergency fund is one of the basic funds that you must save for in building a healthy financial life.

An important factor to consider before even venturing into growing ones money or investing is having a financial cushion.

It will cover unexpected expenses or financial disruptions such as illness, job loss, or even simple house repairs that need immediate action or attention.

Fundmental Steps to build Your Emergency Fund, Mom Finance Blog, How to Build Your Emergency Fund

What is an Emergency Fund

According to investopedia, emergency fund is a readily available asset that can be used to navigate a person’s financial dilemmas like job loss, illnesses, major repair on car or house.

In other words, it is a cash buffer that is readily available once you need it.  It is solely intended for use during emergencies only.

How much  Do I need to Save or Set Aside for this Fund

As I often mentioned, personal finance is personal so the amount of this fund that you should be setting aside depends on how much are you willing to set aside for emergencies.

However, many books and financial advocates recommend setting aside 3-6 months of expenses to set aside for emergencies.

Personally, the bigger, the better.  I myself set aside 1 year worth of expenses for emergency fund because that is the amount I am comfortable with.

Fundamental Steps to Build Your Emergency Fund

1.Make it a Priority.  Cliche as it may sound, the saying if there’s a will, there’s a way holds true when you save up for this fund.

You need to make it a priority regardless of the many expenses that you have.

Make it a part of you budget if need be.  Your future self will thank you for doing it.

2. Spend below your means .  This is very self-explanatory but it is easier said than done.

You need to discipline yourself  to be able to set aside funds intended for emergencies.

3.Make it a part of your budget .  If it is written and part of your financial goal, then you will have better shot at realizing your financial plan of setting aside for this fund.

4. Increase your Income .  Sometimes, no matter how you squeeze yourself, you cannot stretch enough with your finances.

It’s not a question of budgeting or prioritizing but an income issue.

Your income may just really be insufficient that you have to shift your focus on increasing your income this time.

You may ask for promotion or salary increase if you are employed.  Another option is to do side hustles for an added income.

5. Funnel all windfalls to this fund .  There are times that you will have unexpected windfall that just fall over your lap.  Do not be too excited to splurge it. Instead, divert it to this fund to achieve the desired amount that you aim for.


Whether we like it or not, there are times that life throws sh*t at us.  It is inevitable so we better be prepared.  The best thing to prepare for it is having an emergency fund that we can dip on should circumstances force us to do so.

If you do not have this fund yet, go start saving for this fund.  You  will have peace of mind knowing that you have a buffer in case unforeseen things happen in the future.

Happy saving everyone!