Build an emergency fund, one step at a time

Start with $400, then build in steps

You may have heard that you should save three to six months of expenses. That can feel too far away to start. The Consumer Financial Protection Bureau (CFPB), a federal agency, suggests a closer first goal. Start by saving what your past surprise bills cost.¹

If you’re not sure, start with $400. Then build your cushion in steps. Each step protects you on its own:

1. $400. Enough for a smaller surprise, like a minor repair or a copay, without borrowing.
2. $1,000. Most of the way to a typical big bill. In 2025, a typical major car, home or medical bill cost $1,000 to $1,999.²
3. One month of essentials. What you’d still pay in a hard month: rent or mortgage, utilities, food, transportation, insurance and minimum debt payments.
4. Three months of essentials. Room to breathe if your income drops or stops.

Surprise bills happen to most people

A cushion turns bills like these into an ordinary week instead of a crisis.

How long each step takes

Rather talk it through? Get started — it’s free

Make saving automatic

The easiest money to save is money you never see. The CFPB suggests two ways to set that up:¹

• A recurring transfer. Your bank or credit union moves a set amount from checking to savings on every payday.
• A split direct deposit. Your employer sends part of each paycheck straight to your savings account.

What matters most is that it happens every time, without you having to decide.

Save part of a refund or a gift

One-time money can move you up a step at once. The CFPB suggests saving all or part of a tax refund or a cash gift.¹

Our guide to making your refund work for you shows one way to split it.

Keep it safe, separate and earning

Keep your emergency fund somewhere you can reach in a day or two. For most people, that’s a savings account at a bank or credit union, not the stock market. Stocks can lose value right when you need the money. Investing is for goals that are years away, as our step-by-step guide to investing explains.

• Safe. Choose a bank or credit union with federal insurance: look for “Member FDIC” or “NCUA.” If it ever fails, you get your money back, up to $250,000.³⁴
• Separate. Money that sits next to your debit card tends to get spent. A separate account, or even a separate bank, adds a helpful pause. Give it a name that says its job, like “Surprise bills.”
• Earning a little. The national average rate on savings accounts was 0.37% in September 2026, about $3.70 a year on $1,000.⁵ Some banks pay more, so compare rates, and any fees, before you choose.

When you use it, refill it

Using your emergency fund isn’t a failure. It’s the fund doing its job. When a surprise comes, pay for it, then keep your automatic transfer going and rebuild.