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Building an emergency fund

When life throws you an unexpected curveball, like job loss, car repairs, or a medical bill, it can leave you significantly out of pocket. That’s where having an emergency fund comes in, designed to help lift the weight of financial stress during times of uncertainty.

In this guide, we'll walk you through the benefits of having an emergency fund, how much you should aim for, and practical tips to grow your fund.

What is an emergency fund?

An emergency fund is your financial safety net, a dedicated sum of money that is set aside for life’s unplanned challenges and emergencies.

An emergency can be anything that sits outside of what you typically budget for – ranging from medical emergencies and unexpected car repairs to times when your employment takes an unexpected turn.

Why is an emergency fund important?

Emergencies are stressful, and having the peace of mind that comes from financial preparedness can make all the difference during a crisis.

Having a dedicated sum of cash at the ready can help mitigate financial stress, as well as prevent the need to borrow money or accumulate debt.

How much emergency savings should I have?

There’s no one-size-fits-all when it comes to the amount in your emergency fund. When setting your target, it can be helpful to consider how much money you would realistically need to live your current lifestyle for three months without an income and the need to borrow.

Once you’ve defined your savings goal, you can start budgeting for regular contributions to your emergency fund.

How to save money 

Every contribution to your emergency fund counts, no matter how small.

If you’re not sure where to start, sit down with your budget and identify areas where you can redirect funds toward your emergency account. If you have capacity to save the same amount of money on a regular basis, try setting up regular automatic transfers.

If you need an extra hand mapping out your budget, try our Savings Calculator and Budget Tracker tools.

Want your savings to work harder for you? Consider keeping your emergency funds in an account that rewards you for saving like our Dream Fund, which offers bonus interest for growing your account balance each month.

Have a home loan with us? Another great place to stash your savings is in an Offset Account, which works by offsetting interest on your home loan while also accumulating funds for an emergency.

Lock it away for a rainy day

Want to protect your emergency fund from impulsive withdrawals? With People’s Choice, you can request that your savings account is configured as deposit only - meaning money can’t be withdrawn unless you contact us to request this.

Remember, we all start somewhere – and taking small steps now could help prepare future you for life’s next challenge.


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Make your money go the distance and try our Budget Tracker to calculate your income and expenses.

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