When to use it
Use it before or alongside other financial goals to build a basic safety net.
How to apply it
- Work out your essential monthly costs.
- Set a first target, such as one month of essential costs.
- Keep the fund separate from your everyday account.
- Save towards it automatically each month.
- Define in advance what counts as an emergency.
- Refill the fund after you use it.
Tip: A common longer-term target is three to six months of essential costs, but any cushion helps.