
Emergency Fund Breakdown
Yay! Emergency Fund has got to be one of my MOST FAVOURITE topics to talk about.
I have so much fun explaining the importance of an emergency fund because of how MUCH it has saved me in the past. Learning about it was a life changing experience for me and today, I am going to explain to you ALL that I know on it and how you can have one too!
What is an emergency fund?
Basically, an emergency fund is a section of money that you put aside in case of any pop up financial surprises that happen down the road.
Let’s say something unexpected happens in your life and you need financial help – you have an amount of money to get you by.
Examples of unexpected financial pop ups:
- surprise dentist visit
- your car breaks down
- something in your house needs immediate fixing
- you’re sick/you lose your source of income
Real life example #1:
I remember being 19 years old – I wasn’t putting my money in the right place AT ALL and living pay check to pay check. One day, I lost my very expensive work shoes. I had a mental breakdown because I had no idea how I was going to afford new shoes.
Luckily, later that day I found them but I knew I needed change my ways, AND FAST.
Why do I need it?
If you’re anything like me, you might be thinking “If I have extra money, why wouldn’t I want to spend it?”
But trust me, you don’t want to be surprised and not have any money to back you up. Life is unpredictable and unfortunately, with adulting – you have to be on your toes just in case.
How do I save up for it?
Saving up for an emergency fund SOUNDS like a lot but it is so much easier than you think.
You can start out small.
Pick a number that you realistically keep up with that you don’t think that you’ll notice gone. Maybe, do some budgeting and decide how much you can afford to set aside.
I go more into depth with learning how to save money here in my blog A Beginners guide to saving money where I break down budgeting and how to think about money.
Real life example #2:
When I first decided to save up money for an emergency fund, I didn’t have much to set aside. I started off with $50 biweekly/ $100 a month.
Once I started making more money at my job and seeing my money start to pile up – I pushed myself further until I was saving $300 biweekly.
How much should I save?

You have to think of an emergency fund like a backup plan.
Therefore, the recommended amount would be all your expenses for 3 – 6 months. I am talking living, food, transportation, EVERYTHING. Imagine you lost your income source – you have to put aside the amount of money that would be needed in that time before you could get back on your feet.
What you should be accounting for:
- Shelter ( Rent, mortgage, etc)
- Food
- Transportation
- Utilities
- Credit card/loan payment
Any MUST NEEDED payments within that time need to be budgeted in. You don’t want to miss an important factor!
Where do I store my savings?
This is VERY important – do not leave this money in your every day chequing account. As this number builds, the urge to spend will be astronomical. You want to take this amount and move it to somewhere you won’t be tempted to touch BUT you can still get to in case of emergency.
Great places to store your emergency fund:
- TSFA (Tax Free Savings Account)
- High Interest Savings account
How long do I store it for?
The beauty of this is that you can keep going however long you’d like or stop whenever you’d like. An emergency fund isn’t to stress you out at all – its purpose is to do the EXACT opposite. It’s there to purely to give you a peace of mind. Things happen all the time and just knowing you’ll be taken care of is so calming.
Real life example #3:
There are so many times that my emergency fund had saved me but I will choose one BIG example,
My boyfriend and I just bought a house and JUST moved in when – BAM! – Covid 19. We both worked in the hospitality industry so it’s safe to say we both lost our seemingly “solid” positions.
I was panicking.. but at the end of the day – we both had our emergency fund. We PREPARED for this. I was instantly calmed by the fact that we had breathing room and we were going to be OKAY.

Let's recap:
Emergency fund = safety blanket. To have control over your money is a great way to have control over your financial independence.
1. Emergency fund is being prepared. Being prepared is being smart. Be smart!
2. Start slow and work up at your own speed. The simple fact that you’re doing it is AMAZING.
3. Save 3 – 6 months of your monthly expenses. I mean ALL of your expenses.
4. Take it out of your daily account and move it to a savings account. You don’t want too easy of access but just enough that it’s not unattainable if you need it urgently.
Last be not least, have FUN with it. This is exciting and this is a great start to gaining your financial freedom. To know that you have money tucked away in case something happens is such a liberating feeling. You’re doing great!
Great advice Pam!! You are right ~ you just never know when life throws you a curve ball and you need some money in a hurry. Well written and as always, I am very proud of you and Cam xo
Aww, thank you SO SO very much! You’re so right – it truly helps! You’re so amazing – very thankful of you xoxoxo