Finance, Get Out of Debt, Save Money

How to Build a $1000 Emergency Fund in 100 Days!

An emergency fund can be the key to a more secure financial future. Having even a small cushion to fall back on might just be the single most important thing you can do to protect your finances.

As humans, our lives are incredibly complicated and you never know what is going to happen tomorrow. In this post, I’m going to outline some tips and tricks as well as some habits that you can add to your life to try and make it happen. Let’s change your life! 


What is an Emergency Fund?

In the simplest terms, an emergency fund is a stash of money that you keep completely separate from your “everyday money” in order to cover unexpected expenses that you couldn’t have planned for.

The best thing about an emergency fund is that it stops you from having to use credit or ask family members when something unexpected happens. 

Why Do You Need an Emergency Fund?

Sometimes life can get a little crazy and you can’t always be prepared for it. We never know what’s going to happen tomorrow and if we aren’t at least sort-of prepared for the unexpected it can really throw a wrench into our entire lives.

Here are a few things that could possibly happen where you might need some quick cash: 

  • Your family’s only car breaks down and you have no way to get to work or get your kids to school 
  • Your work hours get cut in half or you lose your job 
  • Someone in your family needs emergency medical attention 
  • You landlord sells your home and you unexpectedly have to move 
  • You need an emergency plane ticket to go to a loved one’s funeral

All of these are situations that you can’t always be prepared for, but if you have an emergency fund set up you can be a little more successful at dealing with them. When you have some money set aside you’re less likely to make bad money decisions like payday loans and credit cards. 

“I have an emergency fund that I used to help a family member through an unexpected crisis. Being able to turn her children’s tears to smiles meant everything to me, I’m so thankful that I had the means to help her out. After the family member got back on her feet she was inspired to start her own emergency fund after she saw how my fund helped her” – Cara Palmer from

How Much Should be in Your Emergency Fund?

In this blog post, we are focusing on a $1000 starter emergency fund because it’s a great jumping off point. 

I want to focus on the $1000 emergency fund because most people aren’t even able to get $500 together if something bad happened, and 3-6 months of expenses is a little too much to ask for someone who doesn’t have any savings at all. 

Most financial advisors are going to tell you to have 3-6 months of expenses stowed away for emergencies.

Why 3-6 months?

Well, what’s the worst thing that can happen to a person financially? Losing their job or having a medical event occur where they are no longer able to work. If you build up 3-6 months of expenses you’ll be able to weather the storm without having to sell your home and destroy your credit.

If you feel like you don’t even have two pennies to rub together, just focus on a smaller goal like $1000 set aside, let’s make that happen for you. 

When Can You Dip Into Your Emergency Fund?

The first step to a successful emergency fund is the ability to distinguish between your wants and your needs. You need to understand that an emergency fund is just that, an EMERGENCY fund. It is not a “dip into whenever I want because it’s my money” fund.

Let’s discuss a few reasons NOT to use your emergency fund: 

  • Your friend invites you to lunch but you don’t get paid until tomorrow
  • You promised to buy your daughter a new pair of shoes but didn’t budget properly for it 
  • You “need” a new outfit for an event you’ve known about for a month 

Do you understand why these things aren’t emergencies? All of the above are things you could’ve planned better for, and don’t need them in order to stay alive another day. 

Emergency funds are there for things that come up unexpectedly and you don’t have an opportunity to plan ahead for them. The only time you are able to dip into this fund is if there is a serious medical emergency, your car is undrivable, or your home is caving in. 


The 3 Steps to Start a $1000 Emergency Fund 

Step 1: Figure Out Where You’ll Keep It 

The thing about an emergency fund is that you never know when you’re going to need to dip into it. You might need to take $500 out tomorrow and you’ll never know. It’s super important to make sure it’s in an account where you can take it out at a moment’s notice.

The second thing we need to realize about emergency funds is that they aren’t there to be an income. You don’t need to be making a high-interest return on the money because it’s just there as a cushion for you to be protected against adversity.

Also, you want to make sure you’re never paying bank fees on the account you decide to keep your emergency fund in. You won’t be making a ton of transactions on the account so you shouldn’t have trouble with finding a free banking situation.

If you’re Canadian (like me!) I highly suggest you keep your emergency fund in a Tangerine savings account. Tangerine is an online bank that has no fees and if you use my orange key 50681730S1 when you sign up you’ll get $25 when you make your first $100 deposit (free money towards your emergency fund)!!

So find a bank account that has 3 things:

  • no fees 
  • no hold on withdrawals 
  • any basic interest rate  

Step 2: Start Saving 

The first step toward being able to save money is to know where all of your cash is going. It’s kind-of like doing a financial audit on yourself. What you need to do is write down all of your transactions for an entire month and see where you’re able to cut and where you can’t. Understanding your finances is a super important aspect of being able to save.

To really be able to save money, you need a budget. I know, budgets aren’t sexy, but they work. The purpose of a budget is to give your money a place to go proactively and not just react to the decisions you make after the fact. If you’re looking for a simple, beginner level budgeting tool, I always suggest that my readers start off using the Zero-Based Budgeting Method because it’s easy to understand and accounts for all of your finances.

A great way to get your first few dollars in a savings account is to set up an automatic transfer to your emergency fund every time that you get paid. If you make your zero-based budget and you can’t cut much else out, even transferring a dollar a week will get the ball rolling. You can slowly work up towards $100 as your income increases or expenses lessen.  

Step 3: Make More Money 

The best way to start saving money without completely losing your mind is to start focusing on increasing your income. If you’re able to increase your income without changing your lifestyle, you’ll be able to save all of that money and fill your emergency fund that much quicker.

I’ve written a few blog posts on my favourite ways to increase your income

Final Thoughts 

Once you’ve reached the $1000 point in your emergency fund, you have a decision to make. You can either keep building this nest egg until you hit the 3-6 months of expenses range, or you can start to pay down all your debt.

The one thing about continuing to build your nest egg if you’re still severely in debt is that you’ll be paying a bunch of money in interest and not really have that much money to put toward your savings.

If you ask me, the best thing you can do is to have your $1000 starter emergency fund and then work on your debt. You can still put half of your available income towards saving and the other half towards debt if that makes you feel more secure. 

Just focus on the good and work toward a better financial future, one step at a time! You can do this. If you need any help with building up your emergency fund or have any questions leave them in the comments section below or message me through the contact page. 

Hey! My name is Taylor O’Halloran and I’m a huge fan of saving money any way I can.I’m obsessed with dogs and I love all kinds of cheese even though my stomach hates it.  I’m a recent university graduate who just wanted to do her own thing and see what happens! Follow me on the journey!

Taylor O'Halloran

Hey! My name is Taylor O'Halloran and I'm a huge fan of saving money any way I can.I'm obsessed with dogs and I love all kinds of cheese even though my stomach hates it.  I'm a recent university graduate who just wanted to do her own thing and see what happens! Follow me on the journey!

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