Building an emergency fund is one of the most important actions you can take to improve your financial situation. To ensure you are prepared for any unexpected expenses or emergencies that come your way, every household should have a solid savings account. An emergency fund of four to six months of living expenses will help you sustain financial security, and can help you avoid potentially falling behind on paying bills or accumulating credit card debt. The following tips will help you build and maintain an emergency fund.

  1. Pay yourself first. Setting up payroll deduction or auto contributions from your checking account will help force you to contribute to your savings on a regular basis and reduce temptation to use the funds for "wants" instead of "needs". Take the opportunity to save your tax returns or bonus paychecks instead of spending the extra money.
  2. Open a savings account that will allow you to access your money, without penalties, in the case of an emergency. While it’s understandable to seek out an account with a high rate of return, it’s more important to open a low-risk account so your money is available when you need it. FNBO Direct’s online savings account offers a competitive interest rate and easy access to your funds. Learn more by visiting Also, ensure your emergency fund savings and any other savings accounts you may have are considered separate. Your emergency fund should not be used for a vacation or a new car.
  3. Set a goal and monitor your progress and success. Don’t expect to have your entire savings goal accounted for right away. Review your monthly spending and look for opportunities to reduce spending and direct those funds to your savings account instead. It's okay to start small by just saving what you can spare, and increase your contributions as your budget allows.
  4. Treat your savings contribution as a monthly bill. Add your monthly savings to your list of expenses and budget accordingly. Try saving 5% to 15% of your monthly salary to get in the habit of contributing to your savings plan regularly. After you’ve built up your emergency fund, you will already be accustomed to saving and can continue to build up additional savings for additional goals you may have.
  5. Save at least three to six months worth of living expenses. Consider how much your current income is and the total of your monthly expenses. Also, consider possible emergency situations your family could encounter and determine how much savings each would require.

Building up a sufficient emergency fund will not only give you peace of mind and help you prepare for the unexpected, but put you in a solid financial position to secure a positive future for you and your family.