How to Build an Emergency Fund: Start with Just $50 a Month

An emergency fund is your financial safety net—money set aside specifically for unexpected expenses like medical bills, car repairs, or job loss. Financial experts recommend saving 3-6 months of living expenses.

Start small. If saving thousands seems overwhelming, begin with a goal of $500 or $1,000. This amount can cover many common emergencies and give you peace of mind.

Automate your savings. Set up an automatic transfer from your checking to your savings account each payday. Even $25 or $50 per week adds up to $1,300-$2,600 per year.

Keep your emergency fund in a high-yield savings account. This keeps the money accessible while earning more interest than a traditional savings account. Many online banks offer rates of 4-5% APY.

Only use your emergency fund for true emergencies. A vacation or new TV doesn't qualify. If you do need to dip into your fund, make rebuilding it a priority.

Celebrate milestones along the way. Each time you reach a savings goal, acknowledge your progress. This positive reinforcement helps maintain motivation for long-term saving.