How to Rebuild an Emergency Fund

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How to Rebuild Your Emergency Fund

Emergencies happen. They’re one of the unfortunate facts of life. Sometimes you’re ready for them, and sometimes they take you by complete surprise personally and financially. But as the great Vince Lombardi (Mr. Facts of Life, himself) once said, “It’s not whether you get knocked down, it’s whether you get back up.” So here’s a guide for getting back up after an emergency and how to rebuild an emergency fund.

What Is an Emergency Fund?

Emergencies have a way of complicating your finances. This is why it’s so important to have an emergency fund. An emergency fund is a reserve of money you’ve placed aside to only use for the unexpected events that life may throw your way. You’ll use your emergency fund for any large expense that you have to pay for without notice. These unexpected events will vary for each person, but can include the loss of a job, illness of a pet, broken down appliances, auto repairs, natural disaster damage and much more. 

It’s expected that you’ll use and have to replenish your emergency fund each time you experience an unexpected expense. If you’ve had to spend (or maybe you’ve lost) a lot of money in a short amount of time recently, you’ll need to start the process of rebuilding your reserves so you can be prepared for future unexpected expenses. It’s daunting, but the short-term strain of building or working to rebuild an emergency fund can save you money and worry in the long run.

How Much Should Be In Your Emergency Savings

The general rule of thumb is to have at least three to six months’ worth of expenses in your emergency fund, but you can also use an online emergency fund calculator to see how much you should save. If your current emergency fund is empty or recently depleted, you can start with smaller goals and work your way up. For example, you could make a goal to save $1,000 in that fund. Once you achieve that goal, you can then increase your goal to $3,000 and so on.

The easiest way to start building your emergency fund (or rebuilding it) is to use a budget and track your spending. Make sure that adding money to your emergency fund each month is part of your budget. But just putting a budget together isn’t enough. You also need to stick to that budget to make sure that you don’t overspend. Regularly review your expenses and update your budget every week to make sure you’re staying on track. Sticking to your budget can help you put the necessary funds toward paying off your emergency expenses and building back up your emergency savings account. 

Where to Keep Your Emergency Fund

When an emergency rocks your world and you barely have enough money to pay for what you need, it’s important to have easy access your funds. However, you don’t want your funds so easily accessible that you’re tempted to spend them on other things. Do your research about different account options and determine what will work best for you.

Ideally, an emergency fund is kept separate from your day-to-day checking and savings accounts. This is to help you stop temptation from using them for non-emergencies. Common places to store your emergency fund are a savings account, a money market deposit account, savings bonds, or even some combination of those options. It’s a good idea to make sure that whatever type of account you use, you’re able to deposit more funds regularly and your money can be easily withdrawn when an emergency strikes. 

5 Tips to Rebuild Your Emergency Fund

Now that you know how much you need to save and where you should store your money, it’s time to focus on rebuilding your emergency fund. These are our top tips to rebuild your emergency fund as quickly as possible. 


  1. Make A Budget: As mentioned above, the first thing you should do is evaluate your spending and build a budget. Find out what your total income is for the month and create a budget that keeps your spending less than your income. Make sure there’s a portion of your budget going toward your emergency fund each month.
  2. Track & Cut Your Spending: To really make your budget work for you, you’ll need to track your income and expenses. There are many ways to handle this ranging from the high-tech solutions of using an app to the good old-fashioned envelope organization. If you’re spending more than you make or exceeding your budget on certain categories, you’ll need to cut down on your expenses. 
  3. Prioritize Your Money Goals: Your financial goals will be unique to your specific situation. However, we recommend prioritizing rebuilding your emergency fund over buying things you don’t necessarily need – like a new TV or computer. Prioritizing your emergency fund could also mean putting less money toward your student loans or mortgage payments for a while. (You’ll still need to make the minimum payments on those each month, though.) 
  4. Go On A Short-Term Spending Freeze: You’ve probably heard this advice before, but it’s worth hearing again! Limit your spending as much as possible on things you don’t actually need. Instead of spending money, get creative on using things you already own. Plan a movie night at home rather than going to the theater, or be your own barista and do your best to make your favorite latte. Saving $5 or $10 here and there may not feel like it’s really helping, but we promise it adds up. 
  5. Find Ways to Earn Extra Cash: In our modern society, there have never been so many options to make a little extra cash to help rebuild your emergency fund! With a wide range of online marketplaces to sell things you don’t need and businesses always needing help with delivery, you can have your pick of side work. Have some fun coming up with ideas to start a side gig and earn a little extra money. 

Bottom Line

Not all emergencies can be avoided, and sometimes there’s only so much you can do to prepare. But part of bouncing back is being ready for the next emergency that comes along by working to rebuild an emergency fund now. Live by a budget and build up your savings so you’re ready for whatever comes your way in the future. If you can be financially ready for your next emergency, it will be less of an emergency than it otherwise could be.

Recovering from an emergency takes time and effort, but the measure of a person isn’t how many times they get knocked down, but whether they get back up.