skip to main content
Search Search Investors Icon Investors Careers phone 1-800-318-8997

How To Build an Emergency Fund

How To Build an Emergency Fund

A jar on a table next to a calculator and a notebook. The jar has a sign that reads “EMERGENCY FUND.”

Building emergency savings is often easier said than done. Unlike other savings goals, your emergency savings aren’t something you’ll necessarily see a reward from, which can make it hard to prioritize.

Even so, it’s pivotal to build a plan for your emergency savings goals. In this blog, we’ll go more in-depth about how to do just that.

Why Do You Need an Emergency Fund?

Emergency savings are just that — money set aside in case of emergency. Emergency savings are commonly built for loss of work, but could also include unexpected costs for your car, home, or medical expenses.

It’s important to have this money set aside to prevent financial hardship in the event of these circumstances. A large, unexpected bill could take quite a toll, but an emergency savings could help resolve most, if not all, of the issue.

How Much Do I Need To Save?

Many financial experts describe emergency savings as three to six months of expenses. However, this may look different depending on several factors — your career industry, financial risks, dependents, and more. Learn more in our blog, “How much should be in your emergency fund?”

How To Build An Emergency Fund

Just like any financial goal, building an emergency fund takes time. But just like any goal, every dollar is one step closer to your final goal.

Ultimately, building an emergency fund looks different for everyone. If you’re living paycheck to paycheck or have inconsistent income, you may be limited. The important thing, however, is to build the habit of regularly contributing to your emergency savings — even if that amount is small.

Strategies For Building an Emergency Fund

The best way to get started with your emergency savings is to develop a plan. Get started with the following tips:

  • Build your contribution into your budget. If you plan to save what you have left after your budget and costs, you’re really just planning not to save. If you want to build your savings, rework your budget to include savings contributions as part of your budget and regular financial activity.
  • Try automatic savings. By enabling this, you’ll automatically contribute to your emergency savings without having to coordinate amounts, timing, etc. This can be especially helpful if you struggle to prioritize saving in your budget.
  • Set a small, attainable goal. A benchmark goal helps you stay motivated in your savings. You can even decide on a small treat that will help incentivize you to get there. Once there, try leveling up to another step closer to your long-term goal.
  • Look for new opportunities to save. Every day comes with financial decisions, like packing a lunch versus eating out. If you’re building your emergency savings from the ground up, look for these little opportunities to save a few more dollars toward your savings goal.

Find More Ways To Save With Landmark National Bank

Building an emergency fund can feel like a daunting task. Luckily, the experts at Landmark Financial Bank are here to help. Connect with one of our friendly, helpful partners and learn how Landmark can help you meet your savings goals. Chat with our team online or get started at a Kansas location near you today!

How Much Should Be in Your Emergency Fund?

How Much Should Be in Your Emergency Fund?

A jar full of cash tipped over on a table, surrounded by loose cash, a calculator, a pen, and a notebook. The jar reads “Emergency Fund.”

Emergency funds are critical in securing your financial success in unexpected circumstances. That said, it’s often difficult to pinpoint how much you should be keeping set aside. In this blog, we’ll talk about the general guidelines for emergency savings.

What Is an Emergency Fund?

An emergency fund is a separate account used to cover or help with unexpected expenses. Subsequently, this account is not part of a nest egg or long-term savings — it’s solely set aside as an emergency safety net.

How Much Should Be In Your Emergency Fund?

The most important piece of knowing how much to save is knowing how much you regularly spend. Financial experts commonly advise saving 3-6 months of expenses to help get by in the event of losing work. Your monthly expenses should include your rent or mortgage, utilities, food, healthcare, transportation, personal expenses, and debt repayment.

You do not necessarily have to include your non-essential costs, like subscriptions or vacations, which would theoretically be eliminated in an emergency.

Assess Your Situation

Every person has their comfort level with emergency savings depending on their financial situation. On average, it takes about five months to secure a new job, but some careers may take more or less time to secure a new position. You may also want to consider growing your emergency savings if your income isn’t steady, you’re retired, or during an economic recession.

Ultimately, your emergency savings are supposed to make you feel secure in your financial footing. It may be completely appropriate to have larger emergency savings if it makes you feel more comfortable.

Every Contribution Counts

An emergency fund isn’t built in a day. For some, this can be incredibly discouraging — what really is the purpose of an emergency fund when it’s not large enough to help in case of an emergency?

The purpose is this — every contribution matters. In the event of a medical emergency or loss of work, every dollar matters. And so, while you’re able, every dollar contributing to getting to that benchmark matters.

For example, if you set aside $25 weekly, you would have $2,600 saved at the end of two years. Every dollar added to that contribution further compounds and gets you closer to your goal.

How To Start Building Your Emergency Fund

The simplest way to build emergency savings is to work for a first goal, like one month of expenses. Rather than considering this goal as something you’ll contribute to if you’re able, build this contribution into your monthly budget. You can also implement an automatic savings plan, which will automatically contribute a fixed amount to your savings account from your checking.

If your budget is stretched thin and you don’t have any extra money to contribute to an emergency fund, it may be worth finding ways to cut down your monthly expenses. Remember, even an extra $50 each month will add up over time.

Start Building Your Emergency Savings With Landmark

There’s no better time to build your emergency savings. At Landmark National Bank, we offer a variety of savings solutions, including smart savings and CDs, to help build your financial future. Find a Kansas location near you and get started today!