Having an emergency fund in today’s economy is an essential part of financial stability. But with the rising costs of daily living, it’s not always easy to get that nest egg going.

Part of the obstacle in building your emergency fund is usually getting started. The problem comes when you see tips like “You should have three months’ worth of bills in your fund” and you get overwhelmed. It seems like an impossible task, so why bother trying?

The trick is to remember that everyone starts somewhere. If you keep building nothing, you’ll end up with nothing. Start small and go from there in manageable action steps.

These tips will help you build your emergency fund without making major changes to your current lifestyle.

1. Set A Goal

Knowing what you’re aiming for makes it easier to break the job into manageable steps. Aim for six-month results that you can work on through monthly milestones.

Make the goal reasonable and then adjust it as you go. Because you have a timeframe that is in the near future, it’s going to stay fresh in your mind better than a one-year or five-year plan.

2. Evaluate Your Budget

Now that you know how much you want to save within six months, it’s time to make it happen. The next step is to get real with your budget to see where you have some wiggle room for savings.

Make a list of all your expenses and income. A common financial budget works with a 50/30/20 framework. This method allocates 50% of your income to your necessary expenses (needs), 30% to your entertainment (wants), and 20% to savings.

Break your expenses down into wants versus needs. Do your bills match the 50% and 30% split? If not, how can you cut what’s in each category to get it to work?

A few possible strategies include:

  • Canceling unused or unnecessary subscriptions
  • Transferring high-interest credit cards
  • Shopping around for better rates on your insurance policies

Try to manipulate your expenses around until they fit the 50/30/20 split. When they don’t, the 20% savings is usually what gets dropped first. If that’s the case, it may be time to look into boosting your income.

3. Make An Action Plan

With a breakdown of your expenses and what’s leftover, you know how much you have each month to put into savings. How does that work with your six-month goal?

Let’s put it into an example action plan.

Say your goal is to have $6,000 in savings within six months. You bring home $8,000/month and your expenses are $4,000 (50%). Your wants fall into the 30%, or $2,400, portion. This leaves you with $1,600 per month to put into savings, mathematically speaking.

The math says you should be able to save $9,600 in six months, but where is that money going? Figuring this answer out is part of your action plan. It’s easy to lose track of our surplus funds when we spend without thinking twice.

An easy fix to this is to find out how much you are “supposed” to have to allocate to savings per check. Then, work with your bank or employer to have that much put directly into your emergency fund each pay period.

4. Adjust Your Goals As You Build

Every six months, you can adjust your goals to account for your current financial circumstances. Maybe you’ve paid off a credit card or gotten a raise. If that’s the case, you can add more to your savings.

When you feel secure with your emergency fund, you can even start putting your 20% elsewhere in investments. A diverse portfolio will help you start your retirement years on the right foot. A savings account is great, but the interest you net isn’t nearly what you could make through other investments.

Eventually, the ideal aim would be that you don’t even miss the money going into your nest egg. You’ll get used to living a 50/30/20 lifestyle, or whatever technique you’ve used to budget, and saving money will be second-nature!


You know you need an emergency fund and that it’s the financially smart thing to do. But getting started might require a bit of a push.

With this guide, you can take control of your finances and build a solid emergency fund. As you learn how to be more aware of your spending habits, you’ll become financially savvy along the way!

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