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If life threw something unexpected at you tomorrow would you be prepared? Whether your computer goes on the blink or you find yourself without a job, having an emergency fund and adding to it regularly means that when you reach a bump in the road, you'll be in a better position to deal with it.

Although planning for the unexpected might seem daunting at first, there's no need to file it in the too hard basket. The trick is to work out what expenses you'd need to meet and make regular contributions to your emergency fund to help cover these. Just putting a small amount away on a regular basis could make all the difference when the unexpected comes along.

Being prepared

Whether it's your phone, appliances or unexpected medical bills: Some things you might be able to do without, but others not.

A good way to size how much you should budget for is by taking  a look around your home to see what you might need to repair or replace (keeping in mind that repairing can cost as much as it does to replace some times) or by speaking to some of your friends that have had unexpected medical costs. Then you should have an idea of how much you should be aiming for in your emergency fund for these unexpected expenses.


From time to time, cars need to be serviced or repaired - unfortunately some more frequently than others. If you're not familiar with likely servicing and repair costs for the type and model of car you drive, it's worthwhile doing some research to get an idea.


If you live away from your family, you never know when you might need to get home in a hurry. It's good to have some money set aside to do this.

Find out how much it might cost you to get home tomorrow by doing some research online.

Still need a figure?

Although we've all got different needs, as a rule of thumb, aim to have $500-$1,000 put aside for short term, unexpected expenses. Saving just $10 a week adds up to over $500 in a year. Even if this isn't enough, having this much spare could go a long way when you need it. The trick is to get started and make regular contributions to your emergency fund.

Planning long term

We don't like to think about it, but it's worthwhile putting money aside should you be unable to work for a while, either because you lose your job, if you get sick or you have to look after someone else. Aim to have enough in your emergency fund to cover 2-3 months of expenses (f you're self-employed or don't have a regular income you might want to save more).

Your expenses include:

  • Rent or mortgage repayments
  • Food
  • Loan and credit card repayments
  • Transport
  • Power and gas bills
  • Internet and phone

Use our budget planner to work out your monthly expenses.

Once you know how much your expenses are, multiply them by the number of months you would like to cover. This will be the savings figure you're aiming for.

Setting up your emergency fund

Because you'll need to be able to use your emergency fund at short notice, you'll need an account that lets you access your money easily when you need to.

Look for a savings account that also pays a competitive interest rate. Some accounts also offer bonus interest provided you meet certain conditions such as a minimum monthly deposit and no withdrawals. Don't forget to check out all the terms and conditions and fees and charges detail before deciding on one. To save you time and to help your savings, once you've set up your account you could arrange for an automatic payment to be deposited into it every payday.

Check your insurance

No matter what stage of life you're at, it's worthwhile making sure you have the right insurance to suit your needs. It's a good idea to review it regularly to ensure you have the right cover. You might want to consider if life insurance and income protection insurance could be right for you. It's important you read all the disclosure documents provided by the issuer of an insurance product before making your choice. Terms and Conditions and exclusions will apply and will differ between products.

Have an emergency but don't have spare cash?

Here are a few other options to consider

Things you should know

This information does not take into account your personal circumstances and is general in nature. It is intended as an overview only and it should not be considered a comprehensive statement on any matter or relied upon as such.