Chad Hensley
Dec 14, 2018 · 4 min read

A sick pet, a broken bone, a flat tire, unemployment. They say life comes at you fast, but it comes at your finances even faster. Put simply, an emergency fund is money that has been set aside to cover any of life’s unexpected events. And while the benefits of establishing an emergency savings fund seem self-evident, new data shows that many Americans are opting to take things a day at a time:

  • 55 percent of Americans couldn’t cover six months of living expenses in the face of unemployment.
  • 54 percent of US adults could not pay for a medical emergency.
  • 42 percent of Americans couldn’t manage an unforeseen auto repair.

And research from Bankrate echoes these findings:

If you’ve fallen behind on (or haven’t started) putting money aside for unplanned expenses, make 2019 the year you take control over your future financial health. (Your future self will thank you.)

Here’s how:

Start by setting a realistic goal

A quick Google search will produce a lot of conflicting advice on how much money you should have in your emergency fund. Some experts believe you should save three to six months worth of living expenses, while others argue that you should aim to set aside up to a year’s wages. Sure, it’s important that your financial goals are ambitious, but more than anything, they should be realistic. The thought of stashing thousands of dollars away can seem overwhelming for those starting from zero. Don’t be afraid to start small. Saving anything is better than saving nothing at all.

Begin by taking an honest look at your budget. How much do you spend on essentials like housing, food, utilities, and transportation? Once you quantify your average monthly expenses, you can better determine a realistic and ambitious goal for your emergency fund. The National Endowment for Financial Education recommends saving three months of monthly expenses and provides a worksheet to help tally your fixed costs. Money Under 30 offers a free calculator that uses factors like job stability and existing liquid savings to help users pinpoint an ideal savings target.

“Whether you can afford $5, $50, or $500 a month, progress is a process.”

Find a home for your savings

Your emergency savings will need a place to live. This might seem like an insignificant detail, but the more difficult it is for you to put money into your emergency fund, the more likely you are to skip it. Consider opening a sub-account dedicated specifically to emergencies. A sub-account is a smaller savings accounts that sits under your main bank account. Sub-accounts are ideal because they’re easy to navigate and help you visualize the progress you’re making towards reaching your goal.

Fulfill your commitments

So you’ve decided how much you’d like to save and where you’d like to save it. Now what? It’s easy to say that you’re going to start saving money, but actually staying the course and following through is a challenge in and of itself. If you are someone who has a difficult time putting money aside, you may want to consider setting up automatic deposits to help you stay on track. That way, you won’t have to worry about accidentally overspending or forgetting to transfer funds. If you’re not a fan of automatic deposits, you can create calendar alerts on your smartphone to remind you to move money when you get paid. Lastly, talk to your friends and family about your emergency fund. Discussing your financial goals can boost your confidence and reignite your enthusiasm if setbacks occur.


Rome wasn’t built in a day. Everyone has their own circumstances to consider. Less than ideal wages, high living costs, nagging student loan debt — we all have reasons why we haven’t saved as much as we’d like to. And chances are, it’ll probably take a while to build your emergency fund. That’s okay. Whether you can afford $5, $50, or $500 a month, progress is a process.

Next year, we’re bringing N26 Spaces to the US. Spaces is the fastest, easiest, and most flexible way to put money aside for your financial goals. Interested? Join our waitlist to gain early access.

N26 US Magazine

N26 is coming to the US

Chad Hensley

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N26 US Magazine

N26 is coming to the US

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