Do You Have an Emergency Fund?

An emergency fund is an account reserved to cover potential, unexpected expenses that occur if you lose your job, become ill, lose a loved one, or when a major repair to your car or home is needed. An emergency fund is like an insurance policy, the difference is you can access the money anytime without having to pay a deductible. You could actually use money from your emergency fund to pay an insurance deductible if needed. The bonus to having an emergency fund is that the money deposited collects interest.

If something unexpected and costly occurs, determining how and even if you can pay the expense will only add to the stress you’re experiencing. Unfortunately, some people are forced into debt to pay for large and unexpected expense. Opening and contributing to an emergency fund makes good financial sense.

Start with a realistic savings goal and adjust your budget, if necessary, to account for it. Then regularly contribute. Most financial experts suggest saving between 3 and 9 months of monthly expenses; however, each person’s financial and lifestyle circumstances are different, so there is no one size fits all standard.

When determining your emergency fund savings goal, consider the following set monthly expenses:


Your emergency fund should include expenses such as rent or mortgage, property tax and utilities. If you own your home or have a mortgage on your home, this is likely one of the biggest investments and purchases you will make in your lifetime, so it is important to protect this asset.


Determine what your monthly food expenses are and include as part of savings goal. If you are in financial difficulty there are ways to reduce the amount of money you spend on food such as avoiding take away, using coupons, or buying items on sale. The money you save could be applied to the savings in your emergency fund.


Payments for car insurance, home insurance and medical insurance are typically withdrawn on a monthly basis. You don’t want your insurance coverage to lapse, so factor in these costs.

Debt Repayment

Even though your income has changed (in the event of a job loss, or illness that precludes you from working) debt repayments don’t stop. Do your best to get ahead of your debt so you can avoid the hassle and stress if you find yourself unemployed. However, if you are not able to get out of debt make sure to factor in your monthly credit card or loan payments as part of your set monthly expenses.


If you own or lease a vehicle, your emergency savings should cover the costs necessary for the vehicle including loan payment, car insurance and the cost of fuel.

Personal Expenses

These expenses include clothes, toiletries and household supplies. Although it may seem that it’s not necessary to include smaller, less expensive items, factoring in their costs will help you remain prepared.

The MoneyUnder30 website has a calculator that can help determine the amount to aim for in an Emergency Funds account.

When you’re ready to open and contribute to an Emergency Funds account, there are several types and options available to you. Giraffe has reviewed and examined hundreds of Savings Accounts that you can search and compare on our site.

Things to consider when opening a Savings Account

  • Online Banks typically pay higher interest rates on deposits because without brick and mortar locations their overhead is lower.
  • It is worth the time and effort to review all fees and features associated with your accounts. Monthly fees vary and can include a monthly maintenance fee as well an excessive transaction fee.
  • What is the minimum deposit required to open the account, and is there a minimum amount needed to keep the account active?
  • Features such as mobile check deposit and account alerts.
  • Ensure that the Bank or Credit Union is insured by either the Federal Deposit Insurance Corp. or the National Credit Union Administration.

If you’re looking for additional information don’t hesitate to send an email. We’d love to hear from you.