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Emergency Funds 101: What You Need to Know

What's an emergency fund? Put simply, it's money you set aside for unexpected yet urgent expenses. An emergency fund (or rainy day fund) is one of the most important things you can do for your financial future. In fact, it should be one of your highest savings priorities. This is because emergencies—like a significant home or car repair, job lay-off or unexpected medical bills—can really set you back financially. But, when you have money put away for just such an occurrence, you minimize your financial risk and give yourself peace of mind knowing that you can handle unexpected expenses.

How much should I have in an emergency fund?

If you're just starting to build an emergency fund, a good starting point is to save at least $1,000. However, some financial advisors recommend setting aside anywhere from three to six months of living expenses. Another way to think about it is to save a certain percentage of your income, in the range of 10-20% for your emergency fund. While there are different opinions about the proper amount, it really comes down to your lifestyle and what makes you feel comfortable. For example, if you're single, you might not need as much as a married couple or a family with children. Begin with small goals, and then work your way up to your goal amount.

How do I build my emergency fund?

The first thing to do is to tackle your budget. Review your monthly spending and find “extra" money you may have every month. If you don't have much wiggle room in your budget, consider cutting back on a few expenses or looking for a side job to earn some extra cash. While building an emergency fund may require some sacrifices now, it's well worth it to be prepared for the unexpected.​

Move this money into a separate account using automatic transfers, or create a direct deposit to your savings account for every paycheck. Try to avoid keeping these funds in your personal checking account so you're not tempted to dip into it for everyday purchases.​

Can I speed up the process?

Automatic withdrawals will steadily build up your fund, but it can take many months to reach your goal. "Windfall" money can be an excellent way to grow it faster. Windfalls are things like tax refunds, salary increases and bonuses and monetary gifts. Instead of spending this money, deposit it in a high-yield, interest-bearing savings account like Wright-Patt Credit Union's TrueSaver® or Money Market account so you can access it when you need it.

Another way to build up your emergency fund faster is to save your spare change. You could use a coin jar to stash your extra change or take advantage of a savvy savings tool like Wright-Patt Credit Union's EasySaver® debit card round-up program^. With EasySaver^, every purchase you make with your debit card will be rounded up to the nearest whole dollar and deposited into your EasySaver account. Plus, WPCU matches 50% of your roundups earned during your first 30 days in the program and 5% on all your roundups each quarter after that^. You can then transfer the balance into your emergency fund and watch as your small change adds up to big savings!

Save Better for the life you want to live

Creating an emergency fund now can help assure you're able to live the life you want to live, regardless of the emergencies that come your way. Start with baby steps, putting aside a small amount of money each week or month and increasing the amount as you can. Over time, you'll have a solid emergency fund—and peace of mind—to help you through whatever the future may hold.

At Wright-Patt Credit Union (WPCU), we're here to make life a little easier for you with better ways to save, spend, borrow and plan for life's changes ahead. Want to learn more about our savings account options? Read more here or visit one of our convenient Member Center locations.

Looking for additional financial​ tips, tools and advice? Be sure to check out WPCU's online Education Center for helpful videos, brochures and worksheets on a variety of financial topics.

​​​​^The Credit Union reserves the right to cancel or modify the EasySaver Debit Card Round-Up Savings Program at any time, at its sole discretion. Only transactions posted to your account as debit card purchases are eligible. The Credit Union does not control whether a transaction is processed as a debit card transaction and is not responsible for how the merchant or any network processes a transaction. ​Enrollment in eStatements is required to receive an EasySaver® match. Match will be paid on eligible funds in member's EasySaver account at quarter-end. Match is reportable on IRS Form 1099. The annual match limit is $300. Other reasonable restrictions may apply. ​This account is a variable rate account and the dividend rate and APY may change after the account is open. $0.01 minimum balance to earn APY. Fees may reduce earnings on the account. Primary member must not be delinquent on any WPCU loan obligation, have any negative balance in any WPCU share account, or have cause WPCU a financial loss of any kind. The applicable dividend rate is paid monthly in a Tiered Method, based on the average daily balance in the account for the dividend period. The actual APY paid to the share will vary depending on the average daily balance in the share for the dividend period.