How to Build Up a 3-Month Emergency Fund

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How to Build Up a 3-Month Emergency Fund


How to build up a 3-month emergency fund

The first goal you should have before building a 3-month emergency fund is first building it up to $1000 and then continuing from there. It can seem like a daunting task building up your emergency fund to 3 months of expenses, so I suggest creating fun milestones that you are working towards, so you stay on track to reaching your ultimate goal, because you feel like you’ve achieved something along the way.


  • Hitting $1000
  • 1 Month of Expenses
  • 2 Months of Expenses
  • 3 Months of Expenses


Open a Separate Savings Account That is Specifically Only for Your Emergency Fund

Most of the time we are saving for multiple things in one savings account. This makes it very difficult to see how close we are to each of our goals. I highly recommend opening up a separate savings account to have as your “Emergency Fund.”

Figure Out How Much Your Goal Actually Is

Many people talk about saving a 3-month emergency fund, but it seems like such a big goal, that often people don’t end up following through with it. What I suggest to do is to first figure out what are your monthly expenses actually? You will want to include your fixed expenses, “day to day” spending and your “random and non-recurring” expenses. Here is a post I wrote about how you can plan your finances for the entire year (which teaches you how to take into account the “random and non-recurring expenses” which are the ones that tend to REALLY throw your budget out of whack!)

After you have figured this out, what I like my financial coaching clients to do is to figure out their actually emergency fund. What I mean by this is, if you were to lose your job or a pay cut, there are certain expenses that you could cut or reduce, figure this out ahead of time. And then make that number your goal. It will be a smaller number AND it will feel like you can achieve it quicker, which means there is a greater chance that you will work towards actually saving up this amount!

Dial in Your Budget

Go through your debit and credit card statements and see where you can be saving money right now. Tighten up your budget so you have more money that you can put into your emergency fund each month. I have written posts just on dialing in your budget, that you can read here to dive in deeper:

Cancel subscriptions that you don’t really need. Go through your chequing account and credit card statements line by line to see what’s really coming out of your account. I have financial coaching clients who had $300+ in subscriptions coming out of their account that they didn’t know about! If that continued for 12 months, that’s $3600+ that they could have directed instead to their emergency fund!

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Use Cash for Groceries and Eating Out

Using cash for your groceries and eating out is by far the fastest way to save money on this category that you can easily be throwing money down the drain. I do this with my own personal finances and I also have my financial coaching clients do this as well. Depending on their pay periods, they will take out cash twice a month right after they are paid, that will last them for the next 2 weeks. As you see the money going down in your wallet, you naturally cut back on the “extras” and you become more conscious about how much you are spending on groceries and how often you are eating out.

I wrote a post solely on How to Save Hundreds on Groceries a Month, that you can read here.

Cancel Subscriptions

This is an area I see all the time that can be tightened up! Any subscriptions you really don’t need, cancel them and automatically set up a transfer of that amount, from your checking account to your emergency fund savings account.


Set Up an Automatic Payment to be Transferred Each Pay Check

Have a transfer that automatically takes place from your chequing account right after you get paid, to your emergency fund, before you pay your bills. I recommend for you to sit down and figure out your bills ahead of time for the month and then do this step. When people wait after their bills have been paid and after they have spent their money to use what is “leftover,” I often find that they don’t have anything left over and therefore their emergency fund doesn’t grow. So I recommend doing this right after you are paid when you DO have the money, before you spend it.

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Increase Your Income

I love when people and my financial coaching clients are willing to work a little harder and increase their income. It’s a really beautiful blend to live more within your means AND increase your income, to bulk up that emergency fund! There are so many things you can do, from working more hours, asking for a raise, working hard and applying yourself for a promotion as well as side-hustling.

Side hustling is an incredible way to increase your income, you can do SO many different things, here are just a few examples:

  • Virtual Assistant
  • Dog Walker (I know someone who did this and made an extra $6000 one month!)
  • Flipping Furniture
  • Doing Odd Jobs
  • Sell Your Items in Facebook Groups
  • Tutoring, teach English or other languages
  • You can basically monetize any skill you already have!


Be More Excited to Save than to Spend

You need to have the mindset that you are MORE excited to be saving money than you are spending it, otherwise, it is going to be hard to actually follow through with building your emergency fund to a significant amount. Celebrate your little wins when you choose not to spend money, when you switch out a service for something free, when you tighten your budget, etc! Celebrating and getting excited will keep you motivated to make this goal a reality!

If you need more help staying motivated on this journey, check out a post here that I wrote all about how to do this!

If you are having difficulty organizing your finances, figuring out a budgeting system that works really well and planning your upcoming months so you know a much greater picture of your finances, I encourage you to read more about my “Cash Flow Confidence” Program. As a financial coach, I have helped many of my clients through this session to do just that and more.

Want to find out where you really stand financially? Click “Cash Flow Confidence” Program.



Click here to download my Realistic Budget template!



I am very active on Instagram, follow me here for more financial tips & tricks: (@mandyythomas)

Do you have any questions or anything to add? Leave me a comment in the comments below and I will respond back to you!

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