--- title: 'Got an emergency fund? Here''s how to start building one now' source: 'https://youtube.com/watch?v=RWJMHpjP9HY' video_id: 'RWJMHpjP9HY' date: 2026-07-01 duration_sec: 234 --- # Got an emergency fund? Here's how to start building one now > Source: [Got an emergency fund? Here's how to start building one now](https://youtube.com/watch?v=RWJMHpjP9HY) ## Summary Financial expert Lauren Sprung provides a step-by-step guide on building an emergency fund, starting with determining the right amount based on personal circumstances and then budgeting monthly contributions. She recommends using high-yield savings accounts for liquidity and higher interest, and advises using the fund over credit cards for discretionary expenses, with a plan to replenish it. ### Key Points - **Alarming statistic** [00:00] — 27% of Americans have no emergency fund as of 2024, the highest since 2020. - **Calculate your target** [00:31] — Determine the amount needed based on personal factors like job stability and self-employment. - **Range of fund size** [00:58] — For stable jobs, 3-6 months; for self-employed, 12-18 months. - **Where to keep the fund** [01:36] — Use a separate high-yield savings or money market account for liquidity and better interest. - **Emergency fund vs. credit card** [02:08] — Better to dip into emergency fund than use credit card for discretionary purchases, but refill it promptly. - **Rebuilding after use** [02:50] — Rebuilding follows the same process: set a goal, budget monthly, and save in a separate account. - **Life stage considerations** [03:24] — Younger people need more for job loss; older people may need less but for home repairs. ## Transcript According to bank rate, as of 2024, 27% of Americans don't have an emergency fund, the highest percentage since 2020. If one of your goals is to start building those emergency funds, we are here to help. Lauren Sprung, Midland Financial Founder and author of financial planning made personal joins us in studio. Lauren, it's great to have you here with us. So as you're trying to build an emergency fund, where is the right place to start? Yeah, so you have to figure out what the amount is that you need or want for the emergency fund and then start budgeting for it. Create a budget that includes a monthly amount that's going to go towards that emergency fund until you've built that up. So how do you go about the calculus and making sure that you are coming to the right conclusion of what that number should be? Yeah, so that's different for everybody and depending upon your life facts and circumstances, you really want to look at that for your personal situation. For example, if you're in a role that you know if you lose your job tomorrow, you can replace it very quickly, then you can essentially be on the lower side, maybe three to six months. If you're self-employed and worried about the ebbs and flows of your business, you might need something in the range of 12 to 18 months depending. And so where should it be deployed towards as you're thinking about what you've saved up and then what the first items on that checklist should make sure that they're accounted for if you do need to tap into that emergency fund? Yeah, so I would start with setting up a separate account where you have what that goal amount is set aside in your mind or on paper or part of your plan and then start allocating money into that account each month. And typically high yield savings accounts, high yield money markets, those work really well because it gives you a higher rate of interest than you're going to get from the bank and it's immediately liquid. So if that emergency rises tomorrow, you can tap in, get that money without any penalties or hassles. Bank rate study from 2024 found that 38% of Americans were willing to go into debt for discretionary purchases like traveler entertainment. What's more of a risk here taking a credit card balance or dipping into that emergency fund? Yeah, so I think you know definitely taking that credit card balance if ultimately push comes the show of you have to access that money. You're better off dipping into that emergency fund. Hopefully you refill it before your next emergency arises because then you might need to dip into the credit card balance, but you have to be able to you know be flexible with your planning and understand that you know just by taking out of the emergency fund and not going to the credit card doesn't mean that you've solved all your problems. You still have to plan for that emergency. All right, I'm hoping that people don't have to pull a Brian McKnight and start back at one, but if they do, if they do have to tap into that emergency fund and then start over and rebuilding that, what are your tips for starting over? Same thing that you did when you started out, figure out what that emergency fund amount should be, create how much you can put in on a monthly basis and start socking it away in that separate account until you've reached that amount that you've set as your goal and then you're back in business. And then once you've hit that goal and it's tapped out, you can then reallocate those monies to other places in your budget that might require them. Generally, generationally rather, how does the emergency fund planning shift as you are later on in life versus earlier on and just doing some larger planning of how you get started? Yeah, so I think earlier on there's a lot more you know, risks, right? You can have a risk of losing a job, you have a house, as you age maybe you don't have to be worried as much as your job about your job because maybe you're retired, maybe it's now just looking at the emergency, a roof issue, a plumbing issue, so you could substantially lower your emergency fund at periods of time. So it's something that you have to look at based upon your life facts and circumstances. Long, it's always a pleasure to grab some time with you. Thanks for joining us in