Affiliate Disclosure: This post may include affiliate links. Learn more
If you’re like I was and you’re starting from scratch, don’t worry — this guide is for you. I’m going to walk you through how I built my first emergency fund from $0, step by step, without feeling overwhelmed or ashamed.
As I’ve mentioned in some of my other articles, I got my start by using the Acorns app. I didn’t know anything about an emergency fund, but I knew that I needed to start saving money or I’d be stuck at a job until I was 80. Nothing against those Walmart greeters, but I never wanted that to be me when I was older.
Now, Acorns isn’t a great place to start your emergency fund, but I bring it up because looking back I know that by just getting started with savings something, that was the most important thing.
This article will help you go about it in a better way than I did, so let’s jump in.
Why You Need an Emergency Fund
Let’s be honest — life throws curveballs. You don’t know when your car will need repairs, your pet will get sick, or your job will hit a rough patch.
An emergency fund gives you breathing room. It’s the difference between handling a surprise expense calmly and going into panic mode.
And no, it doesn’t need to be $10,000 right away.
Your first goal might be $500 or $1,000, just to create some cushion. That alone can cover:
A car repair
A medical bill
A last-minute trip
A busted water heater
That small buffer can keep you from falling into debt or delaying bills when life happens — and it gives you peace of mind you didn’t know you were missing.
Step 1: Set a Starter Goal (And Don’t Stress About the Big Picture Yet)
When I first heard “3–6 months of expenses,” I felt overwhelmed. That sounded impossible when I was living paycheck to paycheck.
So instead, I started small:
First goal: $500
Next goal: $1,000
Long-term goal: 3–6 months of basic living expenses
You can calculate your ideal fund later. For now, focus on that first $500–$1,000 — the amount that protects you from most short-term surprises.
This goal felt manageable. It gave me quick momentum. And once I hit it, I wanted to keep going.
Step 2: Open a Separate High-Yield Savings Account
This was a game-changer for me.
I opened a separate savings account, outside of my normal bank where I have my checking account. I use this just for emergencies. I use Wealthfront, but you can choose any that you want. Just make sure that you are getting a 4% APY. That way, I wasn’t tempted to spend the money, and it didn’t get mixed up with rent or groceries.
Even better — I picked a high-yield savings account (HYSA) that paid me interest just for keeping money there.
Some other great HYSA options:
SoFi
Ally
Capital One 360
Discover Online Savings
These accounts usually pay 4%+ interest, which is way more than a big-name bank.
Having that money grow while sitting there? Felt like a little bonus for doing the right thing.
Step 3: Find Your First Few Dollars to Save
I started building my emergency fund by doing a quick audit of my expenses. I looked for anything I could pause, cancel, or reduce — just for a little while.
Here’s where I found extra cash:
Canceled a couple of streaming services ($20/month)
Switched to a cheaper phone plan ($30/month saved)
Brought lunch to work instead of eating out ($40/week)
Sold a few things around the house on Facebook Marketplace
In the first month, I found over $300 I didn’t even realize I was spending.
I put all of it straight into my emergency fund — and it felt amazing to finally see that balance start to grow.
Step 4: Make Saving Automatic
This is one of the most powerful tricks I learned: automation makes saving effortless.
Once I had my emergency fund account set up, I created a recurring transfer from my checking account — even if it was just $10 a week.
Here’s why this worked:
I didn’t have to remember to save
I stopped relying on willpower
I treated savings like a bill I couldn’t skip
It might feel like a small amount, but that’s exactly how I built momentum. And before I knew it, those $10s added up to $500… then $1,000.
Step 5: Stash Windfalls and Extra Cash
I decided that every time I got “extra money” — things like:
A tax refund
A birthday gift
A cash rebate or refund
Freelance or side gig money
…I’d toss a chunk of it (or all of it) into my emergency fund.
It’s money I wasn’t counting on, so it felt easier to save. I built up $400 of my emergency fund just using part of my tax refund — and I didn’t miss it.
If you get a bonus at work or sell something big, consider putting a percentage toward your safety net.
Step 6: Don’t Touch It (Unless It’s a Real Emergency)
This was the hard part: leaving the money alone.
I reminded myself of the purpose: this fund was for true emergencies, not vacations or impulse buys.
So what counts as a real emergency?
✅ Medical expenses
✅ Car or home repairs
✅ Job loss
✅ Emergency travel
What doesn’t?
❌ Holiday gifts
❌ Concert tickets
❌ “Retail therapy” after a tough week
By giving that money a mission, I trained myself to respect it. And the more I protected that account, the more I felt protected by it.
Step 7: Keep Building Toward 3–6 Months
Once I hit $1,000, I started thinking long-term.
The standard advice is to build an emergency fund with 3–6 months of expenses. For me, that meant saving around $8,000–$10,000.
I didn’t get there overnight. But I chipped away at it:
Any time I finished paying off a debt, I funneled that payment into savings
I kept my side hustle going and sent 50% of earnings to the fund
I used my budget to track progress (which kept me motivated)
And little by little, the number grew. The more I saved, the more I relaxed. It’s wild how much mental space financial security gives you.
Building an Emergency Fund Isn’t Optional — It’s Freedom
When I had no emergency fund, every surprise expense felt like a disaster. But now that I’ve got money set aside, I feel calm — even when something goes wrong.
And I want you to feel that too.
You don’t have to be perfect. You just have to start. Even $10 in a separate account is a win.
This isn’t just about money — it’s about stability, confidence, and control. Your emergency fund is like a gift to your future self.
What to Do Next
- Open a high-yield savings account
- Set a small goal — $500 is a great starting point
- Find one thing you can cancel, pause, or sell this week
- Set up automatic savings, even if it’s just $5
- Use windfalls to boost your fund faster
You can’t stop emergencies from happening — but you can make sure they don’t wreck your finances.
