Emergency Fund Basics Everyone Should Know

Unexpected expenses are a part of everyday life, but being prepared can make all the difference. An emergency fund is one of the most important tools in personal financial planning. It can help you cover surprise costs, avoid high‑interest debt, and stay on track toward your long‑term financial goals. In this quick, 2‑minute video, you’ll learn what an emergency fund is and simple steps to start building your emergency savings today. Click here for the Spanish version.

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Illustrated dollar bills clipped to a clothesline slide from right to left across the screen, with faint question marks in the background.	What if your car broke down or you landed in the hospital? Do you have the money to cover it?
Statistic appears on screen: More than 40% of Americans don’t have savings to cover a $1,000 emergency.	More than 40% of Americans don’t have savings to pay for a $1,000 emergency.
Text appears on screen: If you’re one of them, it’s time to start an emergency fund.	If you’re one of them, it’s time to start an emergency fund.
Title text appears on screen: ‘What is an Emergency Fund?’	An emergency fund is a savings account you only use for surprise expenses.
Text on screen reads, ‘Should only be used in an emergency.’ Beside the text, an illustrated person on a ladder adds coins to a large savings jar as the coin stack inside grows.	It’s kept separate from other pools of money, your checking account, vacation savings, your 401(k), and should never be tapped for anything other than an emergency.
Text appears on a light blue background: ‘Why create a separate account for emergencies?	Why create a separate account for emergencies?
Text on screen reads, ‘You might turn to more expensive ways to get cash.’ An illustrated person kneels beneath a large stack of dollar bills resting on their back.	Because if you aren’t prepared, you might turn to more expensive ways to get cash.
Text on screen reads, ‘With an emergency fund:’ followed by the bullet points ‘More control,’ ‘Greater flexibility,’ and ‘Long-term security.’	An emergency fund puts you in control of your financial decisions. It gives you the flexibility to decide the best way to pay and protect your long-term financial security.
Text on screen reads, ‘Starting a fund is easy.’	Starting an emergency fund is easy.
Text on screen reads, ‘Put aside any amount you can.’	Simply open a savings account and put aside any amount you can.
Text on screen reads, ‘Make regular contributions.’ Beside the text, an illustrated person on a ladder adds money to a large savings jar.	Even a few hundred dollars is helpful, as long as you keep it growing by making regular contributions.
Text on screen reads, ‘Automate your deposits.’ Beside the text, an illustrated person on a ladder adds more money to a large savings jar.	Automating deposits into the fund can be helpful.
Text on screen reads, ‘Ideally 3 to 6 months of expenses.’ Beside the text, an illustrated person stands on a ladder next to a large savings jar containing a growing stack of coins.	We recommend saving three to six months of your living expenses so you can pay you bills even if you lose your job.
Text on screen reads, ‘This fund isn’t for everyday use.’	Just remember, this fund isn’t for everyday use.
Text on screen reads, ‘Goal = access and stability, not growth.’	Only tap it if you have a genuine emergency. And you should use easily accessible accounts.
An illustrated person traces a path through a dollar-sign-shaped maze with a marker while holding a briefcase.	So when an emergency comes, you can access the money you need quickly.
An illustrated balance scale holds stacks of money and a coin on one side and a target with an arrow on the other, while an illustrated person stands beside the scale.	Saving is about balance. Have fun with your money but also make sure you’re taking care of the essentials like your retirement plan, especially if your employer offers a contribution match.
Text on screen reads, ‘Live your life with confidence,’ with the word ‘confidence.’	With a healthy emergency fund, you can live your life with confidence knowing a surprise doesn’t have to be a disaster.
Text on screen reads, ‘Live your life with confidence.’ Below the text, an illustrated person sits with a laptop on a large check mark beside a clock, calculator, and calendar.	As you think about retirement and other financial questions, know that you don’t have to figure it alone.
Fisher\ SMB logo centered on a light background, with a blue banner below displaying the phone number (888) 322 7586 and email contact401k@frs.net, each accompanied by small phone and envelope icons.	Fisher\SMB is here to help. Contact our retirement specialists today at 888-322-7586 or contact401k@frs.net.
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