Building an emergency fund on an ordinary income

A practical guide for Ridents readers, written from everyday experience.

An emergency fund is the difference between a broken boiler being a nuisance and being a crisis. The first target is one month of essential costs: rent, food, transport and bills. Open a separate savings account with no card, name it, and move a fixed amount on the day you are paid so the saving happens before any spending decisions are made.

An emergency fund is the difference between a broken boiler being a nuisance and being a crisis.

Small automatic transfers beat occasional large ones because they survive bad months. Add windfalls such as refunds or a bonus, and raise the standing order each time your income rises. Once you reach one month, aim for three. The fund is not for holidays or sales; keeping that line firm is what makes it work when you need it.