We all know and heard about the saying, save up for a rainy day. But how many have heeded that advice and actually took the step to start saving? If budgeting is a struggle when you only have enough to pay the bills to begin with, we can imagine how challenging it can be to save up and build an emergency fund. Yes it is difficult—but not impossible. All it takes is some preparation, budgeting and discipline and you’re on your way to getting that emergency fund set up. Your emergency fund has your back for whatever minor financial trouble life throws at you. And while you’re considering making that commitment to save up, let’s talk about these few reasons why you need to build an emergency fund.

It prevents you from incurring more debt

Ask yourself this: Can you afford to cover for at least six months of expenses with the amount saved up in your bank account? If not, consider this as you cue to start your savings as soon as possible. The power of an emergency fund comes from your ability to pay off unforeseen expenses without resorting to debt of any kind. Your emergency fund serves as your personal financial security and gives you a buffer to easily pay for car repairs or any medical emergencies not covered by your insurance. Start by defining a good amount as your goal for your emergency fund. Then, consider putting a small amount to include in your monthly budget to pay off the amount you’ve set as goal for your emergency fund. As soon as your funding goal is complete, you’re free to add on to that amount whenever you can. When it comes to the peace of mind it gives, it’s all worth it knowing you can afford to pay off emergency expenses not included in your budget. In such events you’ll come out debt-free and won’t have to stress out looking for funds anymore. 

You’re new in budgeting

Budgeting takes discipline. And a lot of it. If you’re only starting the habit of budgeting your monthly expenses, it’s always a great idea to allot a little amount each month for your emergency fund. Including your savings as part of the monthly budget ensures that the money won’t get used for anything other than savings. It forces you to consider it as a monthly due that needs to get paid and you can’t touch them unless it’s badly needed. When you’re just starting out in budgeting, you’re likely to setup a system as you go along. Monthly dues. Annual subscription or membership fees. When one falls off your radar, the emergency fund can serve as your safety net, which can temporarily cover expenses that haven’t been included in the budget you initially made for that month. It may take some time to finally figure out a system. Take note of these miscellaneous expenses and make adjustments to your budget schedule as necessary. 

You Only Have One Income

Another reason why it’s essential to focus on building your emergency fund is if you only have one source of income. Especially if you’re the breadwinner and the family’s sole income rests upon you. In case of medical issues or job loss, your emergency fund can take a little of the burden off these stressful events by covering up for your living expenses for a certain period until you can get back on track and start working again. If you are starting a family, you may want to look at building substantial emergency funds as you are starting out with a brand new chapter in life. If you are single, take this opportunity to build an emergency fund while you are busy minding your own business and don’t have too many bills that try to catch up to you yet. 

You Own Your Home

Just as when you are paying for car repairs and maintenance when you have a car. Owning your own home is another reason for keeping an emergency fund in your back pocket. The cost for home repairs come when least expected and you can’t necessarily put a budget on it when the damages are unforeseen. Instead of setting a budget aside for your home repairs each month, move them to your emergency fund to stow some money that’s good for any type of expense that goes outside the budget you made. 


Building your savings is an excellent way to manage your money and keep your peace of mind. Which is why it’s important to choose a partner you can trust, in a place that can help you grow your savings – Calcite Credit Union. Give us a call and let us help you navigate the road to financial freedom.