Five ways to build emergency savings

September 13, 2021

Life is full of surprises, but an emergency fund can help you prepare for whatever comes your way.​

If faced with an unexpected expense of $400, one third of Americans say they would need to use a credit card, borrow from a friend, sell something, use money from a bank loan, line of credit, payday loan, advance, or overdraft … or would just not be able to pay it at all.*

If an unplanned car repair, out-of-pocket medical bill, or other expense would present a hardship for you and your loved ones, consider taking steps now to build an emergency fund.

Financial advisers recommend setting aside three to six months' salary in an emergency fund, and only using those funds to pay for things like health expenses, critical home and auto repairs, or essential expenses after a job loss. And, when you do use emergency funds, it's important to replenish the money as soon as possible.

Get started and save more

If setting aside three to six months' salary seems overwhelming, start small with these tips to prepare for that inevitable rainy day:   

  1. Direct a small portion of your paycheck into an emergency savings account (preferably one that does not offer ATM access). If you can get started with a $5 or $10 payroll deduction, it's better than not saving at all.
  2. Try the $5 trick. Anytime you receive a five dollar bill, put it away in a container in your house. Every few months, deposit that money into your emergency account.
  3. Challenge yourself and family members to cut out nonessential spending and hold each other accountable. Write down everything you spend money on for the next 30 days and look for things that can be eliminated. If you're too busy to write it all down, try an expense tracker app.
  4. Immediately deposit any money you receive (including bonuses, tax refunds, and gifts) into your emergency savings account — before you have time to think about spending it.
  5. Make the most of tax-advantaged accounts that may be available through your employer: 
    • Pay for eligible healthcare and/or dependent care expenses with pretax dollars through a flexible spending account. During annual enrollment (October 25 – November 12, 2021), you may enroll in flexible spending accounts for 2022 if offered by your employer.
    • If you are covered by the high-deductible health plan (HDHP) offered through the Board of Pensions, or another compatible plan, you may open and contribute to a health savings account (HSA). Contributions are tax-free, any investment growth is tax-free, and so are withdrawals for qualified expenses.

Resources that can help 

The Personal Financial Planning Series from Board University is designed to provide foundational financial planning knowledge on cash management and budgeting, debt management and reduction, and saving and investing for retirement. To learn more, log on to Benefits Connect and click the Board University logo in the upper right corner of your homepage. Select Content Library in the upper left corner, then scroll down to the Personal Financial Planning Series. All members of the Presbyterian Church (U.S.A.) and its affiliates may participate in any one or all four courses in the series, which are available in English, Spanish, and Korean.

The Retirement Savings Plan of the Presbyterian Church (U.S.A.) (RSP) can also help with all your financial goals, from budgeting and debt management, to building emergency savings and more. Use the resources and tools Fidelity Investments offers through NetBenefits to learn more, actively plan for your future, and model different scenarios. From the NetBenefits homepage (login required), select Menu on the left side of the toolbar and choose Learn, Planning, or Tools from the options.

Earn Call to Health points

If you have medical coverage** through the Board of Pensions, you can earn 25 Call to Health points for completing the Emergency Savings challenge (September 27 – November 7). 


* Source: Report on the Economic Well-Being of U.S. Households in 2020 (Federal Reserve)
** Call to Health is not available to members enrolled in Triple-S, GeoBlue, or the Medicare Supplement Plan.