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How to build an emergency fund

Updated: Jun 2, 2023

Building an emergency fund can feel overwhelming, and financial security might seem difficult to achieve. But it’s not impossible.

Have you heard the term “financial security”?

Maybe when you think of that term, you’re picturing a 40-something year old with a house in their name, a portfolio of investments, a thriving pension fund and a steady income?

But what does it mean to Squigglers?

For us, the definition of a “steady” job isn’t sitting at a desk from 9-5pm, we like to zig-zag our way through this world. Getting on the property ladder has proven difficult (but not impossible). And although we do love a good investment, we love to invest in ourselves too (we really did connect with our inner spirit on that trip to Bali, didn’t we?).

So how do we, as Squigglers, build financial security? Well, one of the ways is to build an emergency fund.

And how does an emergency fund help?

What if your car broke down? Or you lost your job in “unprecedented times” (talking about a worldwide pandemic here). According to The Guardian, millions were unemployed during the pandemic, and which group was most affected? Of course, Gen Z and Millennials.

So the answer is simple: You need an emergency fund for emergencies – to prep for the unexpected (I know I sound preachy - #sorrynotsorry). So to get you started, here are a few tips and advice on how you can build your own emergency fund.

Ready for another vision board? Create an emergency savings goal

Don’t worry, I’m not going to force you to create another vision board.

This kind of savings goal needs to be more practical. So unfortunately, it’s not thinking about all your dreams and aspirations, it’s more about survival. So, think worst-case scenarios (my head kind of just goes there on its own), and how much money you might need to face them.

A good rule of thumb to give yourself a solid financial cushion is to save three months’ of rent and other living expenses in an instant access savings account (I’ll get to what that means in a sec).

Open an instant access savings account

An instant access savings account (can we make IASA a thing?) is a type of savings account where you can deposit and withdraw money without any restrictions – which means you can put money in or take money out as you please (a dangerous game, eh?). It also means when there’s an emergency, your cash isn’t tied up or locked away – you’ll have easy access.

Plus, if you separate your savings and your spending money into two accounts, you won’t be too tempted to dip into your savings (no, a sale at H&M doesn't warrant dipping into your savings).

The more money you put in to an IASA, the more interest you get (the good kind of interest). Consider it the bank’s way of saying thank you for trusting your money with them. So compare interest rates on the market to get the best deal, or you might feel more comfortable staying with your current bank. Whatever works for you!

Trust me, every penny counts – so save that change

Lots of banks allow you to round up the pennies when you use your card to pay. For example, if you buy a coffee for £2.79 they’ll transfer 21p to your savings account.

This might not seem like a lot to begin with, but those pennies really start to add up every month. Think about it – you’ve already been to Pret or Starbucks five times this week, so you know you’re going to be packing in those pennies.

Pay off your debt, but don’t let it hold you back

The ghost of student loans, credit card debts and payday loans might seem like they will haunt us forever. And it’s definitely cheaper and more sensible in the long run to focus on paying off these debts quicker, especially the expensive or high-interest rate ones.

But that shouldn’t stop you from at least starting to build your emergency fund if you have money to spare, no matter how small. Emergencies don’t come with an ETA, so it’s never too early to start preparing yourself.

If you’re struggling to meet your emergency fund goals..

If your income, expenses and savings aren’t working in harmony to meet your emergency fund goal quick enough, it’s time to complement that with other options. After all, we’re Squigglers – we don’t shy away from taking effective shortcuts.

One way to boost your savings and build that emergency fund quicker is by reviewing your

bills and subscriptions. Are there better deals on the market you could switch to for your utilities? Or any monthly subscriptions that you can cancel?

Another way you can make money to add to your fund is by selling some of your old or unused stuff like old clothes, records, or trinkets (maybe you can add Depop Creator to your bio). Or maybe your side hustle can help you add to your emergency fund too?

And in the event of an emergency…

Yes, use your emergency fund (how long were you waiting for me to finally say that?).

That’s what it’s there for – emergencies. But you might also want to consider the fact that three months’ of rent and living expenses (if that was your emergency savings goal) will only last you so long.

Let’s hope you don’t face an emergency that lasts longer than three months, but if you’re an over-thinker like me, then you should also consider other forms of financial protection – like income protection insurance.

If you’re not able to work because of say, a car accident or cycling injury (how would you type if you broke an arm?!) or because you’re seriously ill, income protection insurance will pay a percentage of your income. Consider it Plan B, or the mother of all emergency funds that could back you up for as long as you need. Find out more about income protection here.

We've partnered with the experts at Caspian Insurance who can help you to find the right income protection insurance policy based on your personal needs. Click below to find out more.


Financial security can seem like a myth sometimes. But it’s not unattainable.

Building an emergency fund is a baby step, but it’s still a step. In the event of an emergency you may trip but thankfully you’ve built a comfy emergency fund to cushion the blow!

And what happens once you’ve hit your emergency fund goal, and you’ve got money to spare? Maybe it’s time to start investing or looking at longer term savings options (don’t worry, I’ll be back with more tips on this, I’m not leaving you in the dark). And trust me, before you know it, you’ll be building your very own financial empire.


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