Career & Side Hustle Coaching For High Achievers

How To Build A 6 Month Emergency Fund (From 0 to 10K!)



At the beginning of April 2020, I hit my $10,000 Emergency Fund goal.

Emergency funds are such a great topic for the 2nd episode of the Millennial Life Admin podcast because it’s one of the foundations of personal finance.

What is an Emergency Fund?

An emergency fund is a set amount of money that everyone should be set aside, for well, emergencies which are unexpected expenses. The opinions of financial experts vary on how much your emergency fund should be. Some people say it should be $1,000, some say it should be 3-6 months of living expenses, and some say it should be more.

Personally, I think it depends on your life and circumstances.

In this episode of the Millennial Life Admin podcast, I shared the 4 specific strategies I used to reach my $10,000 (6 months) emergency fund goal! 

Because as incredible as a feeling as it was and as lucky as I do feel to be in the situation right now with COVID-19, there were times when I didn’t have an emergency fund and there were times when I had to dip into its multiple times.

So I wanted to walk you through the journey and my strategies adapt that will help you either create your emergency fund which I hope you do already have or help you create an ad to your emergency fund and understand why you need to be adding to your emergency fund at your life changes because my journey from 0 to $10K wasn’t very straightforward, it wasn’t even linear.

It’s not like I saved X amount a month and then I got to $10K, one day.

It was really more like $0 to $1K, and then 1K, to $3-4K, and then $3-4K to $7K and then finally from $7K, to $10K. My emergency fund really changed as my life changed and as I reassessed my life and as my risk changed, so that’s why we’re going to be talking all about today and I hope you enjoy it.


My Emergency Fund Journey 

Starting at 0. There was a time I didn’t have an emergency fund and I didn’t even know what it was. This was when I was going to University and living at home. And even though I have been working a part-time job since I was, I didn’t really have money in savings. All my money was basically going to paying off my student loans and for small trips here and there and just personal expenses and that worked out well for a while. I’m also in the very lucky situation where I have a great relationship with my parents and they love me so I was living at home and I never ever was scared of not having a place to live or not having food to eat. So I didn’t really need an emergency fund and that worked out well for me at that time.

But things change. In my third year of University where I decided that I wanted to move abroad and study in Italy. At that point in my life that was going to be the first time that I ever paid rent and I had to buy groceries and obviously wanted to travel around Europe so I knew I would need some money just in case something happened. I didn’t call it an emergency fund because I didn’t really know what that was, but looking back, this was my emergency fund. I travel solo a lot and for me, my emergency fund was the cost of my plane ticket home. This system worked out really well for not only that year, but for the following years. After I graduated university even I was in the stays in my life where I was just coming home working like tote three jobs burning myself out and then going to travel for four to six months on an absolute shoestring budget to become an au pair in France and volunteer in Tanzania. 

However, things changed again though When in when I decided to buy my own apartment and I moved out so typically and I knew at this point in my life, especially saving up I had. Learned what an emergency fund was that I knew that I need about three months of living expenses, especially when you own an apartment on the responsibility is very big.

However, I didn’t really have 3 months of living expenses because the costs of purchasing, closing and furnishing were really high. I was fortunate that I knew many people moving at the time, and I got a lot of stuff for free, but still, it was expensive. Living on my own came with a lot of expenses.

During this 1st year of homeownership, I dipped into my emergency fund 3 times. 

After that, I took emergency fund planning seriously. These were the 4 strategies I used that year to increase my emergency fund in that year.


1. Create A Yearly Budget

I first heard about a yearly budget from Tasha from One Big Happy Life. I’ve always created a monthly budget (I’ve been religiously budgeting since 2014!), but I never really thought about creating a yearly budget.

Steal my budget template here!

I always saved and accounted for big purchases in my monthly budget (for things like travel, Christmas, etc.), but creating a yearly budget let me account for expenses like property tax (which I wasn’t previously used to paying for). 

So instead of looking at your budget from month to month, look at the ENTIRE year. Figure out how much you need in your emergency fund and what expenses you have to pay for certain months. Plan for those expenses when making starting an emergency fund. It is difficult to save for an EF if you’re constantly pulling from it.


2. Prioritize Your Savings Goals. 

Not all savings goals are created equally. To really reach my emergency fund savings goal, I really had to prioritize it. So I stopped saving for travel. And as someone who spent most of my twenties travelling, it was difficult, but I had a new priority in life.

Do not plan to save for everything at once. 

Instead of trying to save for 10 things at once, focus on your EF and when it is complete, focus on the next. 

This prevents you from having to begrudgingly dip into other savings accounts, or even worse making deposits/leases/buy now + pay later options for things you cannot yet fully afford – ex. vacations, weddings, cars, furniture, etc.


3. Start With What You Have + Reassess

To get my emergency fund back, I had to take on a contract job and really prioritize it in my budget. But every step of the way, I just started with what I had. I saved $1000 when I was 21 because I could and slowly got there along the way when I could. By the end of 2018, I reached my 3-month goal of $7,000! 

And after that, I reassessed my situation and took a break. Some personal finance experts would have said to keep going until I reached 6 months, but I stopped because things changed. In 2018, I changed jobs and become full-time permanent in the government, which my job security is extremely high. So with 3 months, and a super-secure job, I felt comfortable taking a break.

I believe in savings fatigue. Especially for something like an emergency fund, you can easily become resentful of your savings strategy. Saving for an emergency fund is not like saving for other goals like a house, car, or vacation, because there is no tangible benefit at the end other than a number in a bank account. And no one ever wants to be in a situation where they require an emergency fund, so it can be hard to only save and cut back everywhere else. 

So with this change in my life, I decided to take a break from emergency fund saving and moved on to…! In the Spring of 2019, I went to Peru and Bolivia to explore the Inca Trail and Salt Flats and travelled again to Sri Lanka and the Maldives in the Fall. That trip was a little bit more unexpected because I got invited to a wedding in Sri Lanka and I originally didn’t think I could go but the vacation time and money worked out so I went (the Maldives was also just right there).

But at the end of 2019, my life changed again when I was involved in an accident on the bus and got a concussion. This meant I had to take time off work, but thankfully I had a Sick Bank Leave at work and additional benefits so my paycheque didn’t take a hit. Another thing that happened was I decided to move in with my boyfriend and decided to rent out my apartment, which meant taking on additional risk.

So at the beginning of 2020, I decided to refocus my efforts on my emergency fund because I had more risk and because I didn’t know if the effects of my concussion were ever going to fully go away and if it would affect my career in the future. 

And in April 2020, I hit my $10,000 emergency fund goal mark! For me, that’s 6 months of living expenses with my boyfriend.

Side note: For anyone who lives on their own, I know emergency fund saving is hard. Living with a partner is MUCH easier so if you ever hear me or anyone talks about my “large” emergency fund, remember: it’s easier. If you are doing this alone, give yourself credit!

So really prioritize your savings strategy. 

$50 on a meal out doesn’t sound like very much, but if you do it every week for a month, that’s $200.

If all you can contribute it $20 or $50 a week, start with that. Do not get discouraged by the disappointment of not waking up tomorrow being able to add $1000 in your EF.

Treat your EF like you would if you were saving for something fun. Add to it when you get a bonus at work, get your tax refund, and side hustle for it if you need it.


4. Take Advantage of High-Interest Accounts At Split Your Emergency Fund Between Different Financial Institutions

The last strategy is something I was actually doing throughout the whole process. My emergency fund is not just 10K in one bank account. I split my emergency fund between my big bank and credit union into various accounts for many reasons:

  • I don’t use my big bank often. The money in there is out of sight, out of mind.
  • My credit union has incredibly high-interest rates. I’m currently on 2.75% interest for 6 months and every year, I’m on a promotional rate for a few months.
  • I keep some of my emergency funds in my TFSA account. I know the best way to use a TFSA is for investing, but I didn’t know that when I was younger. It’s a very small portion, but I see my TFSA saving as my true emergency fund. I never touch that money. It’s only when I’m completely desperate and if I’m in that situation I’m not considering the tax benefits.

I use Tangerine for my credit union and love it! I’ve literally saved thousands (and made hundreds in interest). To get started (and get $50 on me) make sure you use the OrangeKey 44592405S1 when you sign up!

Make the most of your money by choosing a high-interest bank account, especially from a different bank than your main bank. If you can’t trust yourself not to go into the account, open an account with a bank you don’t normally use and set up an automatic transfer. Since you won’t see the money regularly, you will be less tempted to dip into it. 



These were my biggest learning lessons when it came to this journey to a 6-month emergency fund:

  • Your emergency fund number will change as your life does. $1000 is probably not enough. It was barely enough when I was 20 and not paying for my own living expenses.
  • Always reassess your situation and take a break when you can. I don’t believe in hoarding money. There is such a thing as “too much” in an emergency fund because that money could be better used to pay down debt, invest, or to enjoy life.
  • An emergency fund is for unexpected expenses, not unplanned expenses.

 For all the details, listen to the episode and subscribe for more!

Until then, happy saving and spending!

emergency fund

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