I'm Karen!

I am a blogger and finance coach. My specialty is helping couples get on the same financial page and win with money and marriage. 


Personal Finance


Financial Planning

What is an emergency fund?

An emergency fund is money you put aside to cover something unexpected: a redundancy,  a broken boiler, a car repair or a leak in the roof!

By giving you money to fall back on, it can help prevent you needing to borrow money on credit cards or taking out a loan or asking friends or family for help. 

One thing to note: an emergency fund is not to be used for a holiday or Christmas: that’s what sinking funds are for!

If you need help planning an EF, here are some steps to get started.

What is an emergency fund?

How much do you need?

I recommended you have at least 3 to 6 months’ worth of living expenses in an emergency fund.

If your total monthly outgoings – including rent or mortgage payments – are £2,000, you should aim to have between £6,000 to £12,000 set aside. However, the more you can save, the better. 

This may seem unrealistic but it is possible! Start small and build up slowly.

You won’t have a full EM in a matter of weeks but every penny is being built slowly. A small emergency fund is better than none at all. 

Make a start! 

Based on the amount you’ve decided to save, how long will it take to reach your full emergency fund?

It helps to keep a target date in mind and set small goals along the way. You must celebrate those small wins, it’s so satisfying and the small celebration will encourage you! 

I suggest that you open a separate savings account in a bank that’s different from your current account. Otherwise you may be tempted to dip into it. 

I would also advise you not to have a high interest account, as you don’t want this money tied up. If you have an emergency and need to get access to it quickly, a 90 day account isn’t going to work. 

Our emergency funds are in NS&I Premium Bonds. Money can be transferred into our bank account quickly and we may win some money – bonus! 

A good way to stick to your savings plan is to set up a standing order to move money into your EF each month. If you schedule it for the day you get paid, you’ll lower the temptation to spend it.

You can also put extra money into your EM whenever you want. If you have money left over at the end of a month, why not add it to your savings?

Keep it topped up

If you do have to use your emergency fund, then be sure to replenish it as soon as you can. 

Additionally, it’s advisable to review the status of your emergency fund every year. Your financial obligations can shift, rendering what covered 3 months of expenses a year ago insufficient at present.


Having an emergency fund can give you peace of mind. You know that you can financially handle whatever comes your way without going into debt. 

Having an emergency fund also gets you into the habit of saving money and that can never be a bad thing! 

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