Start small: a starter fund
Many people start with a goal of about $1,000. It’s enough to cover small surprises and it feels reachable. Then keep building.
The full-size goal
A common full-size goal is 3 to 6 months of essential expenses. The right size depends on your situation, like how steady your income is. More uncertainty usually means a bigger cushion.
Make saving automatic
Set up an automatic transfer on payday so saving happens without a decision. Use the calculator below to see how long your goal takes.
Where to keep it
Keep it somewhere safe and easy to reach, like a savings account at an insured bank or credit union. Deposits at FDIC-insured banks and NCUA-insured credit unions are protected up to $250,000 per depositor, per institution, per ownership category. Cash at home isn’t protected if it’s lost, stolen or damaged.
What counts as an emergency
A surprise you can’t plan for and have to pay: a medical bill, an urgent repair, lost income. A sale or a trip isn’t one. Planned costs belong in a separate “sinking fund”, which is savings for a known future expense.
After you use it
Refill the fund before adding new extra spending, so it’s ready for the next surprise.