In fact, once you’ve hit a reasonable threshold of emergency savings, Weston says, it’s a good idea to begin another savings account for irregular but inevitable items, such as car maintenance, vacations and clothing. If you need help staying organized, many banks allow customers to create and label sub-accounts for different financial goals.

Everyone needs to save for the unexpected. Having som

How do I build an emergency fund?

  1. Calculate the total that you want to save. Use the NerdWallet emergency savings calculator below if you need help figuring out your expenses for six months.
  2. Set a monthly savings goal. This will get you into the habit of saving regularly and will make the task less daunting. One way to do this is by automatically transferring funds to your savings account each time you get paid.
  3. Move money into your savings account automatically. If your employer offers direct deposit, there’s a good chance they can divide your paycheck between multiple checking and savings accounts so that your monthly savings goal is taken care of without touching your checking account.
  4. Keep the change. Use mobile technology to save automatically each time you make a purchase. There are savings-focused apps that link with checking or other spending accounts to round up the purchase amounts on your transactions. The extra amount is automatically transferred to a savings account.
  5. Save your tax refund. You get a shot at this once a year — and only if you expect a refund. Saving it can be an easy way to boost your emergency stash. When you file your taxes, consider having your refund deposited directly into your emergency account. Alternatively, you can consider adjusting your W-4 form so that you have less money withheld. If modifying your deductions

Why do I need an emergency fund?

Emergency funds create a financial buffer that can keep you afloat in a time of need without having to rely on credit cards or high-interest loans. It can be especially important to have an emergency fund if you have debt, because it can help you avoid borrowing more.

"One of the first steps in climbing out of debt is to give yourself a way not to go further into debt," says NerdWallet columnist Liz Weston.

Why do I need an emergency fund?

Emergency funds create a financial buffer that can keep you afloat in a time of need without having to rely on credit cards or high-interest loans. It can be especially important to have an emergency fund if you have debt, because it can help you avoid borrowing more.

"One of the first steps in climbing out of debt is to give yourself a way not to go further into debt," says NerdWallet columnist Liz Weston.