How to Save up Some Emergency Cash

emergency cash



Your car tire has a nail in it.

Your child has a fever that won’t go away and you’re considering making a trip to the emergency room.

Your boss just gave you the notice that they’re downsizing. Which means they have to let you go.

What do these three have in common?

They all are emergencies that require immediate financial attention—aka emergency cash.

Sadly, many Americans don’t plan on these calamities when saving.

According to this article, 66 million Americans don’t have enough doe to pay for small, unexpected mishaps—as in they don’t have an emergency savings fund.

Emergency car repairs ($500), a trip to the emergency room ($1,000), 3-6 months of living expenses when transitioning to another job ($4,500+), you name it.

So, it’s important to create an emergency cash fund before something urgent and unplanned comes up.

Read on to learn how you can do that!

What counts as an emergency?

For this, we look to the three U’s: unexpected, uncompromising, and urgent.


Unexpected means these are events that you didn’t predict in the crystal ball of life.

You didn’t think your kid would break his arm during a soccer game. Or your dog would get a spider bite.


Uncompromising entails there’s no other choice. You have to pay for this event, like it or not. This usually implies there’s a security risk at stake if you don’t. In other words, it’s necessary.

You have to pay for the x-rays and doctor appointments in order for your child’s arm to heal properly.

You need to take your dog to the vet so the vet can determine how bad the bite is. And give your dog the proper medicine.


Urgent means now. You need access to that cash right away. Because the situation calls for it.

How much?

If this is your first time creating an emergency fund, start small. Aim to set aside $500-$1,000.

Once you’ve reached that, you can save up more.

It’s recommended to save up enough so you’re able to cover 3 months (up to 6 months) of your living expenses.

This is so you have enough money set aside in case you lose your job—which is one of the biggest financial emergencies.

How to save emergency cash

Here are some ways to help you save emergency cash.

Use a money jar

Whenever you break a $20, stash those 5s and 1s in the jar. You can also put loose change in there, and then later convert that into dollar bills.

Incorporate the 50/20/30 rule

This rule requires 50% of your income to go to your living expenses, 20% to your savings, and 30% to personal expenses.

Your emergency cash would be a part of that 20%. (Retirement, savings, Roth IRA, 401(k)… would be in this bracket too.)

Some things to remember

Make sure the emergency fund is liquidated and accessible. So, a simple checking account will do.

Also, know banks don’t have a designated “Emergency Funds” account; it’s up to you to create one.

And, should you want to start investing, set up an emergency fund before doing that. Especially in regards to more volatile deals.

For more financial advice, check out our blog. And be sure to get our Free, Printable Monthly Budget Planner.

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