Every day I am in pain. Big whoop, right? We’re all in some level of pain at some point in our lives. But what if that pain, an illness, or a life emergency prevents you from working or requires a stash of cash to get you back on your feet? How would you afford the mortgage, keep food on the table, or pay for expensive prescriptions while recovering?

Hate to be a downer, but even healthy people can get blindsided with sudden illness or life emergencies. I’ve been unable to keep full time hours since developing my own ailment, a “knee thing”. A “knee thing” is a highly technical (and mostly Latin) way of saying, “Ouchus Maximus! This thing requires surgery, expensive medications, and time away from work”.


My “knee thing” might have brought me to my financial knees if not for my knee-knocking emergency fund. In no uncertain terms, during this time, my emergency fund has saved my a$$.

What is an emergency fund?

An emergency fund is a stash of cash kept in an accessible account, usually a high interest savings account of sorts. This cash is saved for times of emergency need. Emergency needs vary from person to situation, but usually entail an unforeseen event where you must have a sum of money to get over the tough time. An emergency fund is not for buying a new pair of Jimmy Choo shoes, even if they are on sale. 😉

Why should you start an emergency fund?

In a nutshell, s$it happens and bad things can happen to good people. Here are some tangible reasons to start an emergency fund:

  • Illness: keeps you from working and earning money.
  • Job Loss: high unemployment in your region, or cannot find work.
  • Natural Disaster: house blown away in a storm.
  • Death: loss of a loved one.
  • Busted Hot Water Heater: home swimming in water.
  • Fire: apartment burns to the ground.
  • Busted Car Brakes: stopping the car is a good idea.

These are but a few “s$it happens” scenarios which could require a quick stash of cash to get you over the financial emergency hump. These scenarios vary in hardship, but all could use some extra emergency money to help.

How do you start building an emergency fund?

It’s neither rocket science nor “knee thing” painful to start an emergency fund. I started my first emergency fund by socking away $25 a pay, or $50 a month. As I built a budget, paid off debts, and cut variable spending, it became easier to save $100-$250 a month. My thought is it’s better to save a little than to save nothing at all.

A simple system to boost savings is to automatically move your money to an accessible (but not too accessible) high interest savings account earmarked specially for emergencies. You will earn a little interest as your fund grows.

How much stashed cash do you need?

This is a hard question to answer. A “financial advisor” once suggested I keep 3K, while a savvy financial friend believed 3-6 months worth of living expenses would keep me safe. The answer really is it depends on your living costs, financial situation, and level of comfort in knowing you have some financial stores for just-in-case situations.

If you’re blown away by these numbers, then start small with a little cash and slowly build. From my experience, it’s very settling to know there is a little moolah set aside for a rainy day, or a bum knee.

Dear Emergency Fund: You saved my butt so my knee could get better. Love me.