If someone told you to save three to six months of expenses right now, you might laugh. Or cry. Rent, groceries, student loans, and the occasional good time all add up fast. Saving an emergency fund can feel impossible, especially when you’re starting from zero.
But, as Vancity and Aviso Wealth Advisor Josephine Machira puts it, “You are not behind, and you are not alone. One in four Canadians is unable to cover an unexpected expense of $500. This truly reflects the real cost-of-living pressures we face today. The feeling of ‘I can’t afford to save’ isn’t a personal failure; it is a difficult reality that many people face.”
Josephine recommends thinking of your emergency fund as a “peace of mind” fund, something ongoing that you build, use, and rebuild as life happens. “Your emergency fund is your ability to buy options when life’s surprises hit unexpectedly.”
You don’t need to stop enjoying life for the foreseeable future to build an emergency fund. You just need to start somewhere, and we can help you do it.
Start with the basics: What is an emergency fund?
An emergency fund is a chunk of money set aside for unexpected expenses. It’s like a safety net for all of the unexpected, expensive curveballs life can throw at you.
It’s for when your:
- Car starts making a suspicious clanging noise.
- Laptop dies right before final exams.
- Rent goes up just when you lose some work hours.
- Dog decides to eat something that definitely wasn’t food.
An emergency fund gives you a cushion, so these moments don’t automatically turn into credit card debt. “An emergency fund is an ever-evolving fund,” says Josephine. “It can go up and down as we simultaneously save and spend. It is not about full protection; it’s about breaking the cycle of needing debt for small shocks such as minor car repairs, small medical expenses, or unexpected bills.”
How to start building an emergency fund.
When it comes to building an emergency fund, consistency matters more than motivation. Rely on systems, not willpower.
“I’d like you to think of a scenario where two people want to start going to the gym,” says Josephine. “One opts to decide each day if they feel like going. The other has booked classes, paid for them, and put them in their calendar. Who do you think would have the highest probability of success? Likely the latter.”
If you must remember to transfer money to your emergency fund every month, there’s a good chance procrastination or competing priorities will get in the way.
Instead, automate it.
“Most financial institutions offer automated transfers on a set schedule,” says Josephine. “Start there. Name the account ‘buffer’ or ‘safety net’ and develop your ‘rules of engagement’ with the account. Define what an emergency is for you, so you know when it’s appropriate to access the funds.”
Even a small recurring transfer, such as $25 every payday, can help you build momentum over time.
You can have your emergency fund earning interest, too. A Vancity Jumpstart™ High Interest Savings Account lets your money make money while it’s waiting for life’s surprises. And if you’re new to Vancity, learn about the benefits available to new members when you open a Vancity Jumpstart™ High Interest Savings Account. Then start building your financial safety net.
“Define for yourself what an emergency is so you can know the set of circumstances that allow you to access the funds,” she says. “This is a great way to build financial muscle.”
If you’ve struggled to leave savings untouched in the past, consider adding some friction. Josephine recommends asking your financial institution to:
- Limit online access to the account to avoid online transfers.
- Remove debit card access to the account.
- Keep it in a separate account altogether.
“By doing so, we’re not relying on discipline,” says Josephine. “We’re designing a system where saving happens automatically before spending decisions, and emergency funds remain just that, funds for emergencies.”
$1,000 is a great first goal. Here’s why.
Experts have been saying to save three to six months worth of expenses for emergency funds. While that’s still a worthwhile long-term goal, it can feel overwhelming when you’re just getting started.
“What you’re really trying to build isn’t a number,” says Josephine. “It’s a habit of saving consistently, a buffer between you and debt, and a sense of control.”
That’s why Josephine recommends focusing on progress before perfection.
“Three to six months is a great goal,” says Josephine. “But if you’re just starting, focus on building your first small cushion, because momentum matters more than the amount.”
For many people, that first milestone is $1,000. It’s a manageable target that’s large enough to help cover many common emergencies, from a car repair to an unexpected bill.
Remember, an emergency fund isn’t built overnight. Every dollar you save today makes tomorrow’s unexpected expenses a little less stressful.
When money feels tight, start small.
If your budget already feels stretched, a feasible answer isn’t to somehow find hundreds of extra dollars a month. Small, sustainable changes you can stick with are much more reasonable.
“Most people fail not from a lack of discipline, but because the changes they make are too big and unrealistic for their personal financial circumstances,” says Josephine.
Instead of overhauling your entire budget, look for one area where money tends to slip away. Common culprits include unused subscriptions, impulse purchases, or takeout meals.
“If your budget feels tight, the goal isn’t to save big, it’s to create small wins you can repeat,” says Josephine. She recommends focusing on “invisible savings” first:
- Cancel a subscription you don’t use.
- Negotiate a lower bill.
- Switch to an account that better fits your needs.
Small changes like these can free up money for savings without dramatically changing your lifestyle.
And before making non-essential purchases, consider giving yourself a little breathing room. “The goal isn’t to find extra money,” says Josephine. “You’re just helping your money work a little smarter.”
Forget perfection. Aim for consistency.
As the saying goes, “perfect is the enemy of good”. You don’t need to have it all figured out,” says Josephine. “You just need to start and stay consistent. The difference between people who have an emergency fund and those who don’t usually isn’t income, it’s that they began, even when it felt small.”
Start small. Build the habit of setting money aside and gradually increase the amount as you become more comfortable. “As time goes on and your income goes up, increase the amount,” says Josephine. “Your first $500 will be life-changing; your first $1,000 will begin to feel like stability.”
Try this:
- Every Friday, deposit $25 into a savings account. Automate this so you don’t even have to think about it.
- Round up your purchases and move the difference to savings. Apps like Moka will do this for you automatically.
- Make a budget. Take a look at your living expenses, including how much you need for the occasional night out, and see how much of your pay cheque you can reasonably save every month.
- Put extras like gift money, tax refunds, or side-hustle income toward your fund.
None of these moves will make you rich overnight. That’s not the point. The goal is to create momentum and build your savings over time.
You don’t have to do everything at once.
One of the biggest challenges of building an emergency fund is that it rarely exists on its own. You may also be trying to pay down debt, covering rising living costs, enjoying yourself once in a while, or working toward another financial goal.
It’s easy to feel like you have to balance everything perfectly. But according to Josephine, that’s the wrong way to think about it.
“I believe you don’t balance everything perfectly at once. You sequence it,” she says.
Start with your non-negotiables: essential living expenses and minimum debt payments. These are the foundations of your financial stability. “This protects your stability first,” says Josephine. “Everything else builds on top of that.”
Next, focus on building that first safety net of $500 to $1,000. “This helps avoid needing more debt when something unexpected happens,” says Josephine. “This is your financial shock absorber.”
Once you’ve created that initial buffer, you can shift to a more balanced approach. Continue growing your savings, while also putting extra money toward high-interest debt or other financial goals. “Do both,” says Josephine, “just not equally at every stage.”
One way to make this easier is that once your essentials are covered, make a simple plan for whatever money is left over. You might direct 60% toward your emergency fund and 40% toward debt repayment or future goals.
“It’s not about choosing between saving, debt, or living,” says Josephine. “It’s about sequencing them to protect yourself against risks like emergency expenses and ensuring your minimum payments can still be covered if your income is compromised.”
Using your emergency fund means it’s working.
Many people feel guilty when they have to dip into their emergency fund. But according to Josephine, that’s exactly the opposite of how you should think about it.
“We’re trained to think saving equals success and spending savings equals failure,” she says. “But that’s not true when it comes to an emergency fund.”
If your car broke down, an unexpected bill arrived, or your income was interrupted, and your emergency fund helped you cover it, then congratulations! Your plan did exactly what it was supposed to do.
“Dipping into your emergency fund is not a failure,” says Josephine. “It’s proof your plan is working.” She compares it to insurance. You don’t feel guilty for using it when something goes wrong. That’s why it’s there. Once the emergency has passed, the goal isn’t to beat yourself up. It’s simply to start rebuilding.
“Go back to small, consistent contributions and treat rebuilding like the original plan,” says Josephine. After all, an emergency fund isn’t meant to sit untouched forever. It’s meant to step in when life happens.
A real-world example of starting from scratch.
Josephine tells us her own personal story about starting from zero. When she finished her final semester and started her first full-time role, she says a wave of relief hit her. “But life had other plans,” Josephine says.
Around the same time her first paycheque arrived, her rent increased significantly. Her landlord had been generously renting the unit below market value, but rising mortgage costs meant she could no longer afford to do so.
“I remember thinking, ‘Thank goodness this is happening after I’ve finished school,'” says Josephine. “But I’d be lying if I said I didn’t feel discouraged.”
Like many people starting out, her emergency fund balance was $0. The extra income she had been counting on to start saving suddenly disappeared into housing costs.
“Instead of spiraling, I took a step back and re-examined my budget,” Josephine says. “That’s when I realized something important: while my costs had increased, my lifestyle had also changed. I no longer had late nights studying or weekends dedicated to assignments. I had more time and fewer small, habitual expenses.”
Gone were the long days on campus, grabbing coffee between classes, buying snacks during study sessions, or eating on the go.
“What used to be about $37.50 a week on coffee and snacks became $75 in bi-weekly contributions to an emergency fund,” she says. “The extra time I gained became dedicated to grocery shopping and meal prep, helping me stay intentional with my spending.”
The experience taught her an important lesson: sometimes saving isn’t about earning more money. It’s about recognizing where your life has changed and redirecting spending toward what matters most.
“It’s not always about earning more,” says Josephine. “It’s about pausing, reassessing, and redirecting what you already have.”
Ready to build your emergency fund?
Whether you’re starting from zero or trying to get back on track, you don’t have to figure it out alone.
Talk to a Vancity advisor, in person, or virtually about building your first emergency fund. We can help you think through your goals, understand the real costs involved, and create a plan that fits your life today, while supporting the future you’re working toward.
