Steps to Build Your Emergency Fund

1. Prioritize Like a Pro

Before setting money aside, take stock of your financial commitments. What’s non-negotiable? Rent, groceries, bills, and debt repayments should be top priorities. This step helps you see where your money goes and where you can trim the fat.

2. Crunch the Numbers

A good rule of thumb is to save three to six months’ worth of essential expenses. If your monthly costs are $2,000, aim for at least $6,000 in your emergency fund. Calculate what makes sense for you and set a goal. Remember: this fund is for real emergencies, not "I really need a vacation" moments.

3. Find Extra Cash Without Feeling Miserable

Wondering where this magical savings money will come from? A little creativity goes a long way:

* Sell your stuff:

That treadmill doubling as a coat rack? Time to let it go. Sell unused items online or at a garage sale.

* Cut the fluff:

Subscriptions you barely use, takeout habits, impulse buys—trim where you can without hating life.

* Side hustle time:

Whether it’s freelancing, tutoring, or selling handmade goods, a little extra income can fast-track your savings.

4. Open a “Hands-Off” Savings Account

Keeping your emergency stash separate from your regular checking account helps avoid accidental (or very intentional) spending sprees. Go for a savings account with no fees and easy access.

Where to Keep Your Emergency Fund (So You Don’t Spend It on Concert Tickets)

Congratulations! You’ve saved some cash. Now, where do you put it? Not under your mattress—that’s for movie characters and conspiracy theorists. Here are some smarter options:

High-Yield Savings Account – The Smart, No-Brainer Option

Like a regular savings account, but better. You’ll earn interest while keeping your money accessible. Just watch out for fees and withdrawal limits.

A Different Bank – Out of Sight, Out of Spending Reach

Keeping your emergency fund separate from your daily accounts reduces temptation. If you have to log into a different app or visit a branch, you’ll think twice before dipping into it.

Money Market Account – A Happy Medium

A step up from a savings account, offering better interest rates with limited withdrawals. Good if you want your money to grow but still be accessible when needed.

Short-Term CDs – Lock It Up (But Not for Too Long)

Certificates of deposit (CDs) offer higher interest rates but require you to keep your money untouched for a set time. Great if you’re worried about spending it too soon, but not ideal if you might need it on short notice.

Bottom line? Your emergency fund should be safe, easy to access, and growing—without being too easy to spend.

The Reality Check: Why an Emergency Fund Matters

Financial security is still a struggle for many Americans. According to Bankrate’s 2025 Emergency Savings Report:

• 75% of Americans don’t feel financially secure.
• 33% have more credit card debt than emergency savings (better than 2023, but still high).
• People with at least three months’ worth of expenses saved feel significantly more financially stable.
• 89% of Americans say they’d need three months of savings to feel comfortable, and 63% would prefer at least six months.

Key Takeaways

• Saving is about habits, not income. Small steps add up over time.
• Aim for at least three to six months’ worth of expenses to stay ahead of financial surprises.
• Finding extra cash is possible—whether through cutting small expenses, selling unused items, or earning extra.
• Where you keep your money matters. A high-yield account keeps it safe and growing.
• Preparation is everything. The best time to start? Yesterday. The second-best time? Today.

Your future self will thank you for having an emergency fund. Start now—because life happens, and it’s always better to be prepared.