Money·3 min read

Do You Have the One Savings Account Everyone Needs?

A woman looking under the hood of her broken down car
Design: theSkimm | Photo: iStock
July 14, 2022

Plot twists happen. And if your story’s detour comes at a price — and you don't have funds to fall back on — you won’t get a happy ending. Enter: the emergency fund. It’s financial damage control for life’s not-so-fun surprises.

Such as…

Emergencies are crises you couldn’t have predicted or planned for ahead of time. Like a big medical or vet bill, losing your job, or totaling your car. Or, you know, a global pandemic, a war in Ukraine, and resulting inflation.

That wouldn’t include out-of-the-ordinary expenses, like a new sweater or non-urgent medical procedures, like egg freezing. You can (and should) plan for those. In a separate savings account. Hint: that’s called a sinking fund

I’m not really a planner.

Fair. But not having a financial safety net can mean you have to fall back on credit card debtor another loan. That’s stressful when you’re already trying to deal with an unexpected bill. Which is probably already stressing you out.

How much savings are we talking about?

The rule of thumb is three to six months’ worth of take-home pay. Sometimes more if a lot of people depend on your paychecks or you’re self-employed.

That sounds like more than I can afford to save anytime soon.

This is one of those times that pretty much anything is better than nothing. And there’s no set timeline to hit your emergency fund goal.

Start by taking a look at your budget to decide how much you can realistically afford to save each month based on your current spending. Then check again to see if there are a few easy ways to cut back and save more. Some inspo: Cut the cable cord. Download gas price-comparison apps. Unplug electronics when you aren't using them. A little can go a long way.


Building an emergency fund is the first step in having your financial sh*t together. It’s like prepaid (financial) therapy for Future You. Not only can it save you from having to go into debt to cover an unexpected expense, but it’ll spare you a lot of anxiety, too. Mind-wallet win.

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