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6 simple steps to jump-start your emergency fund

Saving several months’ worth of living expenses for an emergency fund can be intimidating, especially when it feels like all of your available cash is already accounted for, each month. If your monthly living expenses came to $2,000, for example, it would take time to save $6,000, or three times your living expenses—the low end of the typical range for an emergency fund. Following these six simple steps can help you get started on building a reserve of cash, bringing with it greater financial security and peace of mind.


Break it down

You’re faced with a daunting task—if you focus on the total. But a total is made up of smaller parts, and those are chunks that you can reasonably achieve each month. Some people, for example, might start with a goal of $100 a month—that’s as little as $3 to $4 a day, but saving $100 a month would bring your reserve to $1,200 after a year. Bank of America clients can use the Spending & Budgeting tool for help spotting opportunities to save.


Pick something and cut it

Everyday savings can add up. You could carpool or use public transportation to save on gas, bring your lunch instead of buying it or cancel that streaming service you don’t watch anymore. Calculate how much you are saving each month from your daily change, and capture that amount by putting it in your emergency fund.

The key is to identify a specific expense to reduce, which is more effective than making a general resolution to “save money.” You can change your overall behavior—if you start small and specific.


Put technology to work for you

An easy way to save more consistently is to set up automatic transfers from your checking to your savings account. Consider coordinating your automatic transfers with your payday—if you have direct deposit at work, you could have a percentage of your paycheck go directly into your emergency savings account each pay period. Bank of America can help you set up your own automatic transfers.


Don’t let debt get in the way

If you’re struggling to pay down debt, saving might be the last thing on your mind. And if your debt carries high interest rates—like credit cards—it might make sense to aggressively pay down balances first. But if your rates and balances are lower and more manageable, you can work on both goals at the same time: Consider allotting funds to both debt and savings each month.


Keep your funds accessible—but away from temptation

Emergency funds must be available when you need them. That means not locking them up in accounts that charge you to access your money—or keeping them in an account you’ll be tempted to tap for everyday expenses. Consider creating a separate, interest-bearing, FDIC-insured savings or money market account.


Now, up the ante

Don’t stop once you’ve hit your initial savings target. Steadily increase your savings goals until you have put aside enough money to cover your expenses for six to nine months—a significant buffer against unexpected emergencies. And with that financial foundation in place, you can apply your strong savings habits to new goals, such as the down payment on a car, retirement or even your next vacation.

Close Disclaimer

The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America Corporation and/or its affiliates assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management. ©2024 Bank of America Corporation.

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