5 Expert Tips To Build an Emergency Fund and Secure It

Emergency fund

If you’re reading this, you’ve probably been thinking about how to build an emergency fund. We don’t want to say it’s the most important thing in the world — but it is!

If your savings account gets hit by some unexpected expense, or if something happens that costs more than you can afford right now (and there are many things that could), having a healthy amount of money saved up will make all the difference.

We’ve compiled these 5 expert tips to help you build an emergency fund, and cushion you from life’s uncertainties.

How To Build An Emergency Fund

Start small, think big

This is a strategy that we’ve seen work for many people in the past. If you want to build an emergency fund of #100,000 or more, start with a smaller amount and then increase it at regular intervals (at least once per year).

For example: if your goal is #50,000 by the end of 2020, then create an automatic transfer from your checking account into savings every month after setting up automated transfers from your bank account directly into savings.

As time goes on and this becomes easier for you—and even more so as it becomes more automatic—you can move up to larger amounts until eventually hitting your full goal!

Raid your wallet, not your savings account

To build an emergency fund, you need to do is get your hands on cash. If you’re not ready to use a debit card, then take out enough money from the ATM machine or bank account that it will cover what you need it to.

This can be used as a placeholder until your emergency fund grows larger and larger, but in the meantime, don’t spend this money on anything else other than what’s necessary: groceries, gas (if necessary), etc.

You should also avoid using those funds for monthly bills like rent or utilities; these are things that have an ongoing cost that won’t be covered by future income until they’re paid off.

Instead of using them up at once when an unexpected expense arises (like an emergency), put aside some extra cash so that when those payments come due again later down the road without worrying about paying them off immediately again before getting back on track with building up more savings accounts!

Decide whether you are going to keep it in cash or invest it

Deciding to build an emergency fund in cash or invest it is a personal choice. Cash is generally safe, simple, and straightforward.

You can’t lose money by keeping it in cash; you can’t earn much interest by keeping it in cash, and you can’t make any great returns by investing your emergency fund.

Also Read: 7 Steps To Create A Savings Plan and Commit To It

Build a habit of saving for emergencies

There are a few ways you can build an emergency fund. First, you should consider what type of emergencies you’re likely to face.

For example, if your car gets stolen or breaks down, it’s likely that the cost of replacing it will be higher than the value of your car itself, so it may not make sense to put money into an umbrella account until after an accident has occurred.

On the other hand, if there’s ever some kind of natural disaster that puts your whole city at risk (like floods), having extra cash on hand could be critical for helping out friends and family members who need help getting back on their feet after everything was lost in one fell swoop!

You’ll also want to figure out how much money is necessary for these types of emergencies before deciding where those funds will go.

Perhaps setting aside #10000 per month would work well enough since this amount can easily grow into something larger over time if needed due to inflationary trends but if someone else needs immediate assistance right now then maybe only #5000/month would do instead?

The point here isn’t so much about how much exactly but rather finding ways around building habits around saving regularly so there won’t necessarily feel like something new every single time either.

Instead, you’ll be making sure there’s always room within budgeted spending amounts without sacrificing quality life experiences along with necessities such as food consumption, etc.

Cut back on the expenses

The best way to build an emergency fund is by cutting back on expenses. This doesn’t mean that you have to live paycheck-to-pay-check and skip meals, but it does mean that you need to start looking at every expense in your budget and trying to reduce it as much as possible.

Reducing discretionary spending is not just about saving money it’s also a great way of building up cash reserves because when we spend less than we earn, this means more money in our checking accounts at year’s end!

Save and Protect: The best investment in uncertain times

You’ve heard the saying, “save and protect.” Well, these are two things that you can do to build an emergency fund and make sure it is protected.

The first step is saving for emergencies. The second step is protecting your savings from any unforeseen financial hardships or unexpected expenses by keeping them in a bank account or other type of investment vehicle that doesn’t include credit cards or loans.

This means not using debit cards for purchases when possible (or at least not more than once every few months).

When it comes time for an emergency situation whether it’s medical bills or a job loss having an emergency fund will help ensure that you don’t have to worry about money while trying to figure out what steps need to be taken next!


In summary, start by keeping a small amount of money to build an emergency fund. Then, as it increases, think about converting some of it into an investment.

The key is to keep saving and investing so that you have a cushion against the uncertainties of life, and also so you can look forward to a brighter future.

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