7 Habits to Help You Build an Emergency Fund on Any Budget

Life happens. Whether it’s a flat tire, an unexpected medical bill, or a sudden job loss, emergencies rarely wait for a good time. That’s what makes having an emergency fund so important. Think of it as a stash of savings for life’s curveballs.

So, how do you build said emergency fund, even when you’re on a tight budget? Create smart habits and save over time.
 

Habit 1: Know Where Your Money’s Going

Tracking your spending has never been easier, thanks to budgeting tools. (Psst! If you’re a BHFCU member, you already have free access to Money Management through Online Banking!) Use your tool of choice to track and categorize your spending for a month or two. You might be surprised by what adds up! Use your newfound understanding of your spending to redirect even a small portion into your emergency fund.
 

Habit 2: Keep It Separate

A good emergency fund is accessible but not too accessible. We suggest opening a separate savings account for your emergency fund so you’re not tempted to dip into it for non-emergencies. A savings account with no fees and easy online transfers is ideal! (Bonus if you find an account that earns higher interest.)
 

Habit 3: Set Realistic Goals

In this case, small-picture thinking can trump the big picture! The general recommendation for emergency funds is to have three to six months of expenses stashed away. While that’s the gold standard, our suggestion is to make a realistic goal to start. Could you spare $50 per bi-weekly paycheck? That amounts to $1,300 by the end of the year! Once you hit that first target, you can build from there. (You can set and track progress to goals in Money Management, too!)
 

Habit 4: Pay Yourself Automatically

Think of your emergency fund deposits as paying yourself. We promise your future self will thank you! And when savings become automatic, it’s easier to stick with. Consider setting up automatic transfers to your emergency fund to keep yourself honest.
 

Habit 5: Save Your Extras

If you come into a little extra cash, it could be the perfect boost to your emergency fund. Consider putting some or all of things like tax refunds, rebates, overtime pay, and credit card rewards into your emergency fund savings account.
 

Habit 6: Celebrate Your Progress

It takes time to build savings, and every step forward counts. Celebrate small wins – your first few months saving consistently or reaching your initial goal. Use visuals or a savings tracker app to stay motivated and watch your progress.
 

Habit 7: Tap Into Your Support Network

You don’t have to be an expert in everything! If you find yourself wondering where to start, we can help. BHFCU members have access to free one-on-one financial counseling with certified experts. Request a call whenever you need it!
 

Make It a Habit

Building an emergency fund isn’t only about how much you can save. It’s about creating a habit of saving. Start small. Stay consistent. And give yourself the peace of mind you deserve.