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As a part of life, unexpected things happen, and they arrive at a time that we least expect it or, in some cases, at a time when you don’t need life throwing anything else at you. Some of these unexpected situations could be something that you need to take care of immediately or an emergency such as medical, car repair, or loss of a job. 

It is hard to prepare yourself for emergencies and the unexpected since we don’t know exactly when they will happen. The good news is that saving for an emergency fund can help prepare and relieve you of the financial aspect of an unexpected situation. In this post, you will learn how to save for emergencies.

We will discuss:

  • What is an Emergency Fund?
  • How much should you save?
  • Ways to save for emergencies
  • How To Not Build Your Emergency Fund
  • Summary

What Is A Emergency Fund?

An emergency fund is money that you put in a savings account that you only use for emergencies or unexpected expenses. You should store your emergency fund in a separate bank then the bank you use regularly. 

Saving your money in a separate account makes it harder for you to transfer the funds to your regular checking account, and since most banks take about three days to transfer funds, this gives you time to think about whether the withdrawal is worth it.

If you are trying to control your spending and become debt-free, I highly recommend setting up an automatic savings transfer until you reach your emergency goal amount. This will help you not to use the money and help you reach your goal faster.

So, what is considered an emergency? 

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  • Medical Emergencies
  • Job Loss
  • Car Repair
  • Major House Repair
  • Family Death

Do Not use your emergency fund for:

  • Vacations
  • Entertainment
  • Gifts
  • Spending Splurges
  • School Clothes
  • Home Decorations
  • Home Upgrades
  • Etc

An emergency fund should only be used for what it is called emergencies.

How Much Should You Save?

If you read my about me page, you will see that I’m using Dave Ramsey Baby Steps to complete my debt-free journey. Step one of the Baby Steps is to save $1000 for your emergency fund. 

$1000 will help you with most small emergency expenses, but some expenses can be more than $1000. Although I agree with Dave’s advice on saving at least $1000, I feel you should save an amount that you feel comfortable with for you and your family; just make sure it is at least $1000 or more.

Keep in mind that this $1000 or more is only if you are still paying off debt. If you have already completed your debt-free journey or do not have debt, I recommend having an emergency fund that will get you through 3 to 6 months of your monthly income, which is Baby Step 3.

Having 3 to 6 months of savings will prepare you for a job loss or medical emergencies until you get back on your feet.

Ways To Save For Emergencies

Now I bet you are wondering, how am I going to save money for my emergency fund. Below I will share with you five ways to build your emergency fund.

1. Side Hustle: A side hustle is a job you do on the side to earn extra income. There are side hustles you can choose online and offline. I will give you a couple of examples of both. 

  • Online Side Hustles
    • Affiliate Marketing
    • Blogging
    • Bookkeeping
    • Transcriptionist
  • Offline Side Hustles
    • Sewing/Crochet Blankets
    • Dog Sitting
    • Baby Sitting
    • Car Detail

If you would like more examples of side hustles, please check out my post on 10 Side Hustles To Help Pay Off Debt.

2. Sell Unused Items: You can also make extra money by going through your garage, closets, or attic to find unused items you can sell. These can be clothes, books, antiques, old electronics, etc. You can sell these items by having a yard sale or trying to sell items at a pawn shop if you can get a reasonable amount for it.

3. Sell One Of Your Vehicles: You will only take this route if you have a vehicle that you own the title on, or your vehicle value is more than the auto loan you are paying. For example, let’s say you have a vehicle that you owe $8000, and the vehicle value is $10000. You can sell that vehicle for the value amount of $10000 to a dealership or third party, pay the bank $8000 and then pocket the $2000 or, in this case, put it in your emergency fund.

Reminder, you will only take this route if you own the vehicle, or your vehicle value is more than your auto loan.

4. Unexpected Money or Income Tax: Another way you can build your emergency fund is by using your income tax refund or any surprise money that shows up at your door. This can be a check you were not expecting in the mail, or a friend or family member finally paid you back. I call this blessing money.

5. Cut Back On Some Of Your Monthly Expenses: You can take a look at your monthly expenses and see if there are things you don’t necessarily need each month or that you can cut back on. For example, I cut back on my cable bill by just using the internet, and I also cut back on my monthly groceries. Doing this helps save me $150 a month.

How To Not Build Your Emergency Fund

Now I want to go over ways you should not use to build your emergency fund:

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  • You should not use Credit Cards.
  • You should not take out a personal loan.
  • You should not use your 401K.
  • You should not ask your friends and family.

Using these methods will put you prolong your journey to becoming debt-free, or it could damage a good relationship with a family member or friend. Although a 401K is your money, there are penalties and fees if you withdraw money early.


Building your emergency fund is not as hard as you think. You just need to stick to your budget, discipline yourself when it comes to spending money and patience. Once you have your set amount of money in your emergency fund, then you will focus on paying off all your debt.

The purpose of the emergency fund while on your debt-free journey is to help with the unexpected expenses while you focus on paying off your debt.

If you have any questions on how to save for emergencies, please leave a comment below or my contact page. I look forward to hearing from you.

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