How to Build an Emergency Fund (that you’re not going to raid!)


If you’re struggling to get control of your finances, it’s an absolute necessity that you figure out how to build an emergency fund. That’s because you need to stop using credit cards. You’re in debt now because you used credit cards. They aren’t a solution, they’re a problem. 

Emergency fund savings

Do what you’ve always done, get what you always got.

If you want your finances to be different. You need to change something. 

You tried using credit cards. Credit cards brought you nothing but debt and “junk” filling up your house. So, now we’re going to change that. No more credit cards. Ever. 

Without an emergency fund, as soon as something goes wrong in your budget (which it will frequently), you’ll go right back to the credit card. 

Let me be perfectly clear. If you’re in debt, you must stop using credit cards. You will never dig yourself out of this mess without ditching the credit cards. You are not the exception to the rule. You are the statistic. 

If there’s one thing I can promise you that will happen, it is that you will go over budget. If you’re new to this, you will go over budget frequently. You need to be prepared and know exactly what to do when that happens. BEFORE it happens.

You also need to have money set aside so that when life doesn’t go as planned, you have options other than the credit card. Hence, the emergency fund.

The secret to actually creating and keeping your emergency fund is to feel “poor”, even when you have money.

You and I, we got into debt because we spent what we had, plus a little extra. Sometimes, a lot extra. Continuing to put unnecessary extras (the takeaways, the new shoes…..) on credit. Or spending the last £100 just because it’s still in the bank.

I know how impossible it feels, but that’s only because it’s different. Change can be uncomfortable, That’s okay.

Here’s the secret. Life will never be predictable. Ever. That’s okay, we can handle that if we think ahead.

Why you spend your emergency fund:

Most people can’t figure out how to build an emergency fund because they’re used to living pay day to pay day.

They’re totally ok with a current account that has £100 of overdraft left until the next pay day. They’re used to it. When they get extra money, it makes sense to spend it. They earned it, they deserve it. I know exactly how that feels, because that was me.

We can’t change the way you feel about that. Your views on money were set in stone long before you met me and they won’t change without a strong motivating factor (usually fear). Even if you swear right now and commit yourself to saving your extra money into an emergency fund, you won’t do it.

Right now, you’re committed to this because you’re reading this. In a week or two, when you have extra money, and your friends ask you to go to the cinema.. You’ll think “I can probably swing that”… and so on, and so on.

This is why you’re poor.

There is nothing wrong with you. This thought process is normal and doesn’t define you. But you need to accept this about yourself.

Understanding your money mindset, for me was crucial in making a positive, lasting change. 

You will not change your life with a sudden burst of discipline. You will change your financial future by knowing your weaknesses and then working around them.

How to not spend your emergency fund:

You’re going to pay your emergency fund like it’s a bill. It’s non negotiable. Sit down right now, and open up a “hard to access” savings account. My favourite ones, are the old fashioned passbook type. No access online. Or look for an account that requires a 30 day notice period.

What happens in an emergency?

Every pay day you transfer a set amount into that account.  Standing orders are great for automating this.

Then you’re not going to think about it in the slightest. If an emergency happens, you’re going to do your best to handle it within your budget. I want the emergency fund to be a last resort, just like your credit cards used to be. (Only better)  

Is there a way that you can make extra money this month to take care of that emergency?

Does your work have overtime available? Can you pick up a side job? Look for those solutions first.

Can you reduce your spending in a budget category and use the savings to handle the emergency?

Reducing your grocery budget is the easiest place to make up the extra money, but can be the hardest if you aren’t organized yet.

If all of those won’t cover it, then I want you to sit down and think long and hard if this is an emergency. I’ve heard of a lot of “emergencies”that aren’t emergencies.

Here’s a few examples:

We had a last-minute holiday opportunity with friends.
I promised my husband a laptop.
We need to buy Christmas presents.

What will happen if you don’t pay for this? Are you afraid to disappoint friends and family? If they were truly friends and family, they would want you to get your money under control. Remember if they upset you… you haven’t lost a friend, you’ve just gained clarity. 

Absolutely sure it’s an emergency? Then go ahead and use your emergency fund. 

What if even my emergency fund won’t cover it? 

If you’re 100% certain that it’s an emergency (feel free to email me if you aren’t sure… I’ll tell you!), then use the emergency fund, reduce your budget, make as much money as you can and see if the company you need to pay will work out a payment plan. 

If they won’t take a payment plan and this absolutely can not wait… Do what you need to do and mitigate the damages as much as possible. 

How much should I have in my emergency fund? 

£1,000 is pretty standard, but some people may need more than that. 

Start with £1,000 but if you have things that may give out at any minute, or potential financial uncertainty such as –

  • An car likely to fail the MOT
  • Job uncertainty 
  • Divorce

Any of these types of situations could get expensive, I want you to aim a little higher. 

What if this plan didn’t work? 

Then you need to distance yourself from the money even more. Get back to budget basics.  You can do this.

I know this doesn’t sound fun, but the peace of mind that this will bring you is so worth it. 

Once you have your money under control there are no limits to what you can, have or achieve. If you want to spend a month backpacking through Europe, you can. This won’t be easy. It will be worth it. 

You can do this. I can help. 


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