The Emergency Fund

When the budget is tight, setting aside money for savings is usually the first to go. We get it. It’s rough out there. But an emergency fund can be the safety net between you and a load of debt when the unexpected happens. With the Andi app’s Wish List feature, setting aside those savings is easier than ever.

What is an emergency fund?

An emergency fund is (usually) a savings account (or even an Andi Wish List) with money set aside for, well, emergencies. Think job loss, car breakdowns, or medical expenses, not necessarily a bougie brunch or a new video game.

How much do I need in my emergency fund?

The general guideline for an emergency fund is between three and six months’ worth of expenses. For example, if you make $1,500/month, a perfect emergency fund would have $4,500–$9,000 in it.

Now, before you go throwing in the towel because it feels impossible to save up that much money… Any amount of savings in an emergency fund is better than none. If three times your monthly expenses feels out of reach, start with a smaller number. Having even $500 in your emergency fund could help cover an unexpected car repair or vet trip.

How do I build up my emergency fund?

There are lots of ways to save money, but all of them feel difficult when money is tight. As much as you can, try to think of the money set aside for your savings fund as just that—money set aside. Think of it the way you think of paying a bill. The money should be out of sight (and in the emergency fund) and out of mind. With the Andi app, you can automatically allocate funds each month to your Emergency Wish List fund, so you don’t have even have to think about it.

Here are some ways to make building your emergency fund a little bit easier:

  • Transfer $10/week over to your emergency fund (in a year, you’ll have over $500!)
  • Set up an automatic transfer each month using the Andi app
  • Have different Wish Lists or savings accounts for your emergency fund and other savings goals (like big purchases)
  • Wait 30 days before making unnecessary purchases, to consider whether or not you really need and want the item
  • Utilize the Andi app’s Break Glass feature—you’ll have to break glass before using the money from your Wish List savings, forcing you to think twice about purchases
  • Use a budget to get a big picture look at your savings and spending
  • Keep your emergency fund in a high-yield savings account

Remember, we all have to start somewhere. The biggest, fullest emergency funds start at $0. We’re rooting for you!