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How To Complete Your Emergency Fund


Your emergency fund, in general, should be 3-6 months’ worth of monthly expenses. There is a more accurate way of computing it based on your needs and lifestyle, but 3-6 months is common.

In the Philippines, a lot of people are having a hard time saving. Depending on their kind of work, some people find it hard even just to save a portion of their money.

Emergency fund jar
PHOTO CREDIT: Public Domain Pictures

But saving for the inevitable is important. Here are some ways to complete your emergency fund:

Set a realistic target

Even if you know that your ideal emergency fund should be equal to 3-6 months of your expenses, there’s no harm in trying to save 1 month’s equivalent first. Having a more realistic goal will make sure you are motivated to complete it and also make sure that the other aspects of your life will not suffer.

Have a cheat day

Yes, cheat days aren’t just for diet. Over the course of you emergency fund-saving, you can have months when you save up a slightly lower amount than what you are used to. You can use this to have a guilt-free enjoyment that will give you a breathing room from saving.

Make it a habit

If you make saving a habit, it will become normal for you, until you won’t even notice that you are being able to save.

Pay yourself first

This means that when you get your salary, you deduct the savings right away, not the other way around. Deducting the amount to be saved and living with what remains will help you live within your means and make sure that you won’t accidentally spend the allotted saving.

Keep it somewhere not easily accessible

You don’t want your savings to be easily accessible where you can just pinch some when you have an “emergency” trip or date. It doesn’t work that way. A good advice is to save it in a bank that is not too near your house but is still accessible in case of emergency.

Automate it

Some banks offer savings accounts that automatically deduct a certain amount on a certain date from your main account. When you do this, you won’t even notice that you completed your emergency fund already.

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