When I first used an emergency fund calculator to work out how much we would need in savings, I was horrified by how much it added up to.  I thought that there was no way that I could ever hope to have that amount in an emergency fund. 

I didn't have enough spare cash to put away, so the thought of having 3-6 months worth of essential living expenses in savings seemed like an impossible task.  How on earth could I save £6000? 

It was just impossible!

Becky from Family Budgeting feels exactly the same "I don't have one and it makes me panic because as a freelancer I never really know how much I am going to earn. This needs to be something we do but I need to free up cash to get it started! Not easy with kids or for a lot of people if we are to be realistic. Daily life is expensive - it is a good aspiration but for a lot of people really hard to achieve"

However, I also knew how I felt without any buffer for emergencies.  I was constantly on edge, hoping that the washing machine didn't break down, panicking every time the car made a strange noise, and uneasy about our finances in general.

It had to change

I decided that enough was enough, and I had to get rid of that nagging feeling of dread! 

I started by setting myself a target of achieving an emergency fund in a year.  That meant that I could break it down into smaller chunks each month, which made it seem much more manageable.  The first month was a doddle, and I actually saved more than twice my target.  That got me off to a great start, and helped to motivate me for the next month. 

Rather than focusing on only saving money, I decided to also look at ways of making extra money.  That really made it much easier, because I was only having to "save" half the money, the other half I was "making"!

Happier, healthier, wealthier

The feeling of having an emergency fund is just amazing! 

I am no longer worried about unexpected expenses, which feels like a great weight has been lifted off my shoulders.  I feel happier,more able to enjoy all the things that I love, and generally more content. 

Bizarrely enough, there seem to be less unexpected expenses now, than before I had an emergency fund! Why on earth should that be?  Perhaps it's because things that previously seemed like a disaster, just seem less important, because I know there is money there to pay for them.  Anyway, I don't care why it seems that there are less emergencies, I just love the fact that it feels that way.

How to build an emergency fund

I used too many different ideas and strategies, to share in one blog post, so I have put together a free Emergency Fund challenge for you.  Simply sign up to the challenge, and you will get immediate access to an online challenge, packed full of ideas about how you can save and make £500 in a 5 week period. 

It's a brilliant wee challenge, and I think you will love it, so why not get signed up right now? 

Before signing up, you will be able to choose what further information you wish to receive.

What do the experts think?

I asked my fellow UK Money Bloggers about their thoughts about emergency funds, and the results were clear.  We all think that having an emergency fund is a great idea.  Here's what they had to say about it.

Biggest benefits of an emergency fund

"I think having an Emergency Fund really helps give us a sense of financial security. We know that if the boiler was to break down or the car to go bang we could get it sorted without worrying about where the money was going to come from and without it impacting ourabailty to pay the bills that month."  says Savvy in Somerset blogger, Fiona.

"Since having an emergency fund AND budget in place I haven’t been stressed about money , it’s freeing and a massive weight of our minds", says Charlotte Musha. 

The Money Whisperer, Emma Maslin thinks "It’s really important to have money that you can access quickly.  The security it provides, against needing to take out debt to fund any emergencies, is so reassuring."

"For the first tine ever I have a healthy fund for emergencies." says Jane from Shoestring Cottage.  "It wasn't difficult once I had given it priority. My car failed the MOT and I didn’t panic. We have the money. An emergency fund brings great peace of mind."

Great for mental health

Jennifer says  "Having an emergency fund gives me reassurance that we can manage financially if things don’t go as planned. As someone with severe anxiety it’s really important to me to have that and I make it a priority to build it back up whenever we’ve had to dip into it."

"The relief I felt after creating my emergency fund was immense. I had debts to repay, but having that £3k sat there lifted stress and worry. Before we had our emergency fund I used to worry about money at least 10 times a day. Not good for mental health."   Lynn shares her story about clearing her debts, and how having an emergency fund helped her.

Andrew says "I do have an emergency fund and I’ve had one for years. Psychologically, the benefit is huge. I don’t think I would have started a financial blog if I didn’t have one. It encourages you to take calculated risks. Risks like starting a website, paying for stock for a business etc. Of course, the financial benefit is something to fall back on if you get into trouble. But to me, that’s not as important as the mental benefit."

"An emergency fund is as good as my nighttime cushion! It protects me against financial shocks and helps me sleep better at night! We are still working towards a 6 x monthly outgoings fund. Half way there. It definitely helps us to make better financial decisions - less based on feeling anxious because we have some certainty." Catherine from The Money Panel 

Where to keep it?

Mine is split between 2 different high interest accounts allowing me to maximise the interest on my emergency fund, as well as allowing me to access it easily if I need it.  

"I keep it in premium bonds so I can get it quickly if ever needed. I also win most months which is a great bonus" says Savvy mum Emma Bradley Charlotte from Looking after your Pennies 

"We have an emergency fund that would cover at least 6 months worth of expenses. Ours is in a cash ISA so it is easy to get to. It feels great to be this secure particularly with two children. If one of us lost our jobs we know that we could survive for well over a year and that’s nice!"

"The combination of my husband's risk aversion and my own procrastination mean we have too much in cash. Even using high interest current accounts, I know that over the long term our money could work harder if I moved more into investments. Leaving too much in cash runs the risk of the value being eaten away by inflation."  Great advice, as always from Faith Archer who blogs at Much More With Less

Something is better than nothing

It can be tempting to think that having 3-6 month's of essential expenses is totally impossible, and just do nothing! 

However, having something in an emergency fund is better than nothing.  Once you have a small emergency fund you will feel the benefits of this, making it easier for you to then add to it over time.

"If you have debts you need to clear, it may not seem right to have an emergency fund because that money could be paying off expensive credit card debt. But without an emergency fund, clearing a lot of debt can be very stressful, with something cropping up every few months to derail your budget and plan."  This is fantastic advice from Sara at Debt Camel, so be sure to check out how "a fund of a few hundred pounds can make the whole process much smoother and mean you are more likely to succeed in getting rid of the debt."

Thrifty mum Alison says, "I have a £1000 emergency fund but still building it up. It gives me peace of mind knowing its there if anything happens. My washing machine broke down last year so I used my emergency find to buy another one straight away without worrying"

Victoria who blogs at Lylia Rose says "I'm currently saving one now and even just having a few thousand in the bank makes me feel so much better. I still have the fear that my husband will injure himself or be made redundant, so I still panic it's not enough and I'm saving six months wages. I save 10% of our joint income per month and treat it like an outgoing. I'd like to save even more, but this is manageable for us at the moment. If we run out of money one month, then we run out of money. It's not there for us to dip in to just to have a good time!  I think everyone should save an emergency fund."

What about you?

Do you have 3-6 month's worth of essential expenses in an emergency fund?  If not, then why not make a start?  It has to be worth a try.

Why don't you also come and join my Your Money Sorted group?  It's a private group, for women only, and it's a friendly and welcoming place, where we can all chat about money.

Eileen x

Hi, I’m Eileen Adamson, Your Money Sorted coach, helping female teachers to become happier, healthier and wealthier. By showing you how to make small, sustainable changes, I can help you create the time, freedom and financial security you deserve.

For more information on how I can help you, please see my coaching courses, my favourite products and services, my Etsy shop or my Amazon shop.

I am taking part in the Monday Money linky with Lynn from Mrs Mummy Penny, Faith from Much More With Less and Emma from EmmaDrew.Info