Let me start with a confession.
A few years ago, I didn’t have an emergency fund. At all. If something unexpected happened—a phone repair, medical bill, or sudden travel—I panicked. Credit cards, borrowing from friends, or delaying payments became the solution. Not proud of it, but hey… been there, done that.
That’s exactly why I believe building an emergency fund is one of the most important money habits you can develop. Not investing. Not side hustles. Just knowing you’re covered when life throws a curveball.
Let’s break it down in a simple, realistic way—no pressure, no guilt.
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| How to Build an Emergency Fund In 2026 |
What Is an Emergency Fund (In Simple Words)?
An emergency fund is money you set aside specifically for unexpected expenses.
Think:
Medical emergencies
Sudden job loss
Urgent home repairs
Emergency travel
Phone or laptop replacement
This money is not for shopping, vacations, or Eid shopping. It’s your financial safety net.
Why You Absolutely Need an Emergency Fund
Here’s the honest truth: emergencies don’t ask for permission.
Without an emergency fund:
You rely on debt
You break your regular budget
You feel constant financial stress
With an emergency fund:
You stay calm
You avoid loans and credit cards
You protect your long-term savings
Trust me, the peace of mind alone is worth it.
How Much Emergency Fund Do You Really Need?
You’ve probably heard “save 6 months of expenses.” That’s great—but also intimidating.
Let’s make it realistic.
Start small:
First goal: ৳5,000–৳10,000
Next goal: 1 month of expenses
Long-term goal: 3–6 months of expenses
If your monthly expenses are ৳25,000, then:
3 months = ৳75,000
6 months = ৳150,000
You don’t need this overnight. You build it slowly.
Step 1: Decide Where to Keep Your Emergency Fund
This part matters more than people think.
Your emergency fund should be:
Easy to access
Safe
Separate from daily spending
Good options:
Savings account
Mobile banking savings
Separate bank account
Avoid risky investments. Emergency money should be liquid, not locked.
Step 2: Save a Small Amount Consistently
This is where most people get stuck. They wait to save “a big amount.”
Don’t.
Start with:
৳50 a day
Or ৳500 a week
Or 5–10% of your income
Consistency beats amount. I started with tiny savings, and honestly, I didn’t even feel it—but over months, it grew.
Step 3: Automate Your Savings (If Possible)
If your savings depend on willpower, it won’t last.
Try this:
Set an automatic transfer after salary day
Save first, then spend what’s left
This “pay yourself first” method works because you remove temptation from the equation.
Step 4: Use Windfall Money Wisely
Extra money is a gift—use it smartly.
Examples:
Bonuses
Gifts
Freelance income
Refunds
You don’t need to save all of it, but even putting 50% into your emergency fund speeds things up.
Step 5: Don’t Touch It Unless It’s a Real Emergency
This rule is non-negotiable.
Ask yourself:
Is this unexpected?
Is this necessary?
Is this urgent?
If the answer isn’t “yes” to all three, it’s probably not an emergency.
Discipline here protects future you.
Step 6: Refill the Fund After Using It
At some point, you will use your emergency fund—and that’s okay.
Once the situation passes:
Restart saving
Rebuild slowly
Don’t feel guilty
That’s exactly what the fund is for.
Common Mistakes to Avoid
Let’s save you some trouble:
❌ Keeping emergency money in risky investments
❌ Mixing it with daily spending
❌ Waiting for the “perfect time” to start
❌ Feeling ashamed for starting small
Everyone starts somewhere.
Emergency Fund vs Savings vs Investments
Quick clarity:
Emergency fund: Safety
Savings: Short-term goals
Investments: Long-term growth
Don’t mix these up. Each has its own job.
Final Thoughts: Start Before You Feel Ready
Building an emergency fund isn’t about being rich—it’s about being prepared.
Start small. Stay consistent. Be patient.
One day, something unexpected will happen, and instead of panicking, you’ll say: “I’ve got this.”
That feeling? Priceless.
Written by
Farhan Rahman – Personal Finance & Money Habits Writer
Last updated: July 2025
Farhan writes about practical budgeting, savings, and real-life money habits for young adults and families across South Asia. He believes financial stability is built through simple, consistent actions—not overnight success.
Disclaimer: This article is for informational purposes only. Please consult a licensed financial advisor for personal advice.
