Chime® is a financial technology company, not a bank. Banking services, credit, and debit card provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

How to Build an Emergency Fund Fast

By Chime Team
February 24, 2017

Congratulations to me! I just hit a milestone in my emergency fund by saving $6,000 last year. That’s a big deal because I only started socking money away to build my emergency savings fund two years ago. How did I do it? I prioritized my emergency fund over other savings. I also found money in my budget to beef up the account at every turn.

I’m not the only one who needs an emergency fund. It’s essential for you too and building your fund can be challenging. Why? We can’t always avoid the random expenses that life throws at us. That trip to the emergency room? The unexpected bill home or car repair bill? A sudden layoff? These are all good reasons to have a money available in an emergency fund. With an emergency fund, you won’t have to worry about how you’ll afford these unexpected costs. With a little planning, an emergency fund can also help you stay out of debt.

If you’re starting at zero, you don’t need to freak out. It takes time to build an emergency fund, but we’ve got a few tips to speed up the process. Take a look at our top three ways to build your emergency fund.

Figure Out How Much You Need

Just so you understand, an emergency fund isn’t just a pile of money sitting in your savings account. It should be a separate savings account that encompasses about 3-6 months of your living expenses.

The best way for you to determine how much you need in your emergency fund is to calculate your monthly expenses. Start with the bare necessities like rent, food, transportation, utilities, and insurance. Then add in other expenses, like savings and any loans or debt, such as a car payment or student loan payments. True wants, like shopping, eating out or travel shouldn’t be included. Once you have the total monthly cost of your necessary expenses, multiply by six. That’s the number you should be working towards.

If you have a concrete goal, such as an actual number you’re aiming to reach, this often will help you save money and help motivate you as you progress. For example, if you’re trying to save $6,000 and you save $300 in your first month, you’re 1/20 of the way there and you’ve got 19 months to go.

Funnel ‘Extra’ Money to Savings

It’s not always easy, but try to funnel any extra dollars toward your emergency fund. For example, you can sock away an unexpected bonus at work, birthday money from your great-aunt, and maybe even a tax refund.

You can also try weekly or monthly spending fasts. For example, a week without going out to eat may yield an extra $50 in your budget and a month without shopping for clothes may free up an extra $200. You can then earmark this cash toward your emergency fund.

Here’s another idea: Try challenging yourself each week with a different way of saving. Perhaps one week you can go without drinks after work, another week you can cook at home instead of dining out, and yet another week you can walk or bike to work instead of paying for public transportation or gas for your car. You’ll soon discover which small luxuries mean the most to you and which you can give up easily. Remember: A spending fast will help you save money and kickstart your emergency fund, but luckily it will not last long.

Get a Jump-Start by Automating

Automation is key when it comes to saving money. That’s because when you automate savings, you save money before you have a chance to spend it. Here’s how it works in a nutshell: With automated savings, your bank removes funds from your checking account and puts the money into your savings account right away. This helps you live on less while your savings continue to grow.

Banks like Chime make automation simple. Unlike other banks, Chime not only helps you save by moving funds directly from your checking into your savings account but Chime automatically rounds up your spending every time you use your debit card. This extra amount is then put directly into your savings. You save every time you swipe. Plus, you can now instantly save part of your paycheck each time your direct deposit hits your account.

I mean, that couldn’t be easier. You set it up once, and boom: a percentage gets saved every time your paycheck comes through. 

Chime has made it super simple for you to get started. First, get online and set up an account. Second, decided what percentage of each paycheck you’d like to save. Lastly, sit back and watch your savings grow. Automation does all the work for you, and your emergency fund reaps all the benefits.

This guide is for informational purposes only. Chime does not provide financial, legal, or tax advice. You should check with your legal, financial, or tax advisor for advice specific to your situation. Your state or local unemployment agency is responsible for making all determinations on your eligibility for unemployment benefits. Please contact your state or local unemployment agency if you have questions.

Chime® is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card and the Chime Credit Builder Visa® Credit Card are issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit and credit cards are accepted. Please see the back of your Card for its issuing bank.

While Chime doesn’t issue personal checkbooks to write checks, Chime Checkbook gives you the freedom to send checks to anyone, anytime, from anywhere. See your issuing bank’s Deposit Account Agreement for full Chime Checkbook details.

By clicking on some of the links above, you will leave the Chime website and be directed to a third-party website. The privacy practices of those third parties may differ from those of Chime. We recommend you review the privacy statements of those third party websites, as Chime is not responsible for those third parties' privacy or security practices.

Third-party trademarks referenced for informational purposes only; no endorsements implied.

‡ SpotMe® for Credit Builder is an optional, no interest/no fee overdraft line of credit tied to the Secured Deposit Account. SpotMe on Debit is an optional, no fee service attached to your Chime Checking Account (individually or collectively, “SpotMe”). Eligibility for SpotMe requires $200 or more in qualifying direct deposits to your Chime Checking Account each month.

Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A. and Stride Bank, N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).

Address: 101 California Street, Floor 5, San Francisco, CA 94111, United States.

No customer support available at HQ. Customer support details available on the website.

© 2013-2024 Chime Financial, Inc. All rights reserved.