Voice of the Expert: 8 tips on starting an emergency savings fund

Everyone knows they need an emergency savings fund. Knowing how to get started is trickier. With seemingly every penny going toward a bill, putting something extra away can be hard. Still, it is absolutely important. Today’s Voice of the Expert, Patricia Jimenez, the Hispanic Outreach Manager for Consumer Credit Counseling Service of Greater Atlanta, tells us how much you should aim to save and how to do it.


Creating an emergency savings fund is a challenge for many people. But at CCCS of Greater Atlanta we advise that everyone should regularly save at least some portion of their paycheck.

Without an emergency fund in place, what will you do if your car breaks down and you need a down payment for an auto loan to replace it? How long could you make ends meet if you lost your job?

The first step to starting a savings plan is to create a monthly budget – an accurate accounting of your income and expenses. For some people it is helpful to carry a small notepad with them for a month so they can immediately record each expense. After doing this for a month, most people can find instances when they spent money on things that can be cut out without a big sacrifice.

Once you have determined to save a set amount every month, here are some strategies to create an emergency fund of three to six months of monthly expenses that allow you to be properly prepared in case of a financial emergency.

  • Create a separate account for an emergency fund that you set aside in case you lose income.
  • Treat paying into this emergency fund as if it were a bill. Many people have a certain amount automatically deducted into a savings account every pay period.
  • Use any “bonus” money to build your fund. This could be a check you get on your birthday or a tax refund.
  • You should keep putting money into this account until you have enough to cover three to six months of your recurring expenses. If it helps, start with a goal of setting aside one month’s worth of expense money. Once you’ve done it, you’ll know from experience how to save for additional months.
  • After you’ve created a fund to cover the possibility you could lose your job, you’ll need to start building an emergency maintenance fund.
  • An emergency maintenance fund should be relatively painless to create, since it probably only needs to be $1,500 or so to cover unexpected repairs. Again, consider setting up a separate account for this fund.
  • The goal with the maintenance fund is to ask yourself how much you would need in the short term if something unexpected happened and you had to replace an expensive item, like a water heater, or replace a car.

When people suffer a job loss or incur an unexpected expense, going into debt can make matters worse. That is why building an emergency fund is an important way to maintain control of your finances even when life throws you a curve.

Do you have a topic you’d like to have discussed by an expert? Email rcash@ajc.com

Here are a few of the past Voice of the Expert guest blog posts:

5 tips for Fighting Foreclosure

Creating and Sticking to a Budget

Dealing with Debt Collectors

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4 comments Add your comment

Frugalista 30097

September 18th, 2009
11:34 am

This was good info. I’ve printed it out for a friend who, like me, is trying to be better about saving. She taught me her “no-buy” method. Basically, I was banned from buying frivilous things for one month. For example, if I went shopping in Sept then Oct would be my “no-buy” month. I’d bank the $ I would have spent on clothes into my “rainy day” acct. This allows me to still ‘take care of me’ while taking care of my finances. I am currently on an aggressive savings plan, where I will have 20% of my monthly salary automatically transfered into my savings acct until I reach my goal of saving $5,000. I will set similar savings goals at the beginning of each year, it’s a resolution of sorts but one I can actually manage to maintain. :-)

David S

September 18th, 2009
12:41 pm

Don’t spend more than you make. Then you always have money for emergencies.


September 18th, 2009
1:37 pm

No different then what Dave Ramsey says. First step is to build a $1000 emergency fund. Unfortunately, once the emergency fund is used, it’s hard to build back up. Our emergency was my husband taking a $2000 month pay cut. It was fine at first, but after 9 months, we are struggling.


October 3rd, 2009
8:24 am

all good things