Three Tips for Setting Up an Emergency Savings Fund

Three Tips for Setting Up an Emergency Savings Fund

• January 22, 2026
• 9:44 am

By NYLAG Financial Counselor Frank Popper

As we all know, life in New York moves fast-and so do unexpected expenses. How prepared are we to deal with a bill that comes out of nowhere? One recent study revealed that 53% of New Yorkers earning low incomes* had no emergency savings at all. Though that sounds bleak, here's the bright side: 26% of New Yorkers managed to set aside some savings (though not enough to replace lost income) and 13% have built a real cushion that could sustain them even if their sources of income suddenly stopped tomorrow. Why is this good news? It shows that saving for emergencies is possible, even with limited resources. Our goal today is to inspire you to start building your own safety net with this story and the practical tips below.

*Low income refers to 200% FPL - about about $64K for a family of four or $31K for a single person

Picture this: It's Christmas Eve in New York-29°F, snow falling as you head home to celebrate. You clear off the windshield of your car with your bare hands because you forgot your gloves. You pull away from the curb, turn up your favorite playlist, and realize: the heat isn't working. Sadly, this isn't the first time the car hasn't cooperated. Last winter, you got stranded and promised yourself you'd start a fund for repairs. As the memory dawns on you (and the fact that you forgot your gloves then too), the speakers blow out. Now you're sitting on the BQE for two hours, shivering in silence, holiday cheer fading fast.

Moments like this remind us why having an emergency fund matters-a cushion that turns stressful surprises into manageable bumps on the road. Ready to take control? Here are practical tips to help you stay ahead of life's cold snaps that throw your plans off track:

1. Set a realistic savings goal.

You can get started by first setting a goal of how much you'd like to save up. How much money you're willing to put into this account is totally up to you, but most financial experts recommend putting 3 to 6 months of your current living expenses into your emergency fund. Though that may be far too much to initially start your fund with, working towards any small amount of savings set aside for emergencies can provide financial security and peace of mind for you in the long run.

• Tip: Use this worksheet from America Saves to help you create saving goals: https://americasaves.org/media/hmqe0mbb/08-19-2025-as-as-financial-goal-setting-worksheet-v1.pdf

2. Set up a regular contribution or make your saving automatic

Next, it's important to set up a regular contribution to work towards that goal on a timely basis. Let's say you want to start by saving $1,000 in your emergency fund. If you set aside $50 every week to contribute to this fund, it'll take you only 20 weeks to accomplish that goal. You can even set up automatic recurring transfers through your checking account to contribute to this emergency fund without ever having to manually transfer the money yourself. Keeping your emergency fund in a high yield savings account or with a credit union can also help you earn interest on the money that you set aside, driving your emergency fund to grow while you make consistent contributions to it.

• Click here for a more thorough breakdown on how to start saving automatically. No AI necessary.

3. Set guidelines for monitoring your fund and when to use it

Setting some solid boundaries for yourself on what constitutes an unplanned expense is key to maintaining an emergency fund. If you really want to grab that new MacBook that's on sale, that's likely not urgent or an absolute necessity. However, don't be afraid to use your emergency savings if you need it.

It's also essential to monitor your savings and track where you are in relation to your initial goal. If you've saved more than you already planned on putting in your emergency fund, consider shifting your regular contribution to another savings account. We recommend checking your emergency fund progress at least once a month.

Ultimately, remember that the purpose of having your emergency fund is to keep you from relying on credit or loans when an unexpected expense pops up. Doing so not only helps you prevent debt but also protects your credit and saves you from much larger balances caused by interest on money you might have borrowed. Building an emergency fund is essential to starting smart saving practices, and it offers a sense of security and "warmth" when that winter snow kicks in.

Still have questions? NYLAG Financial Counselors help you create a plan to secure a financially stable future. 

• If you are currently working with a NYLAG financial counselor, reach out to them now to discuss your student loan options. 
• Connect with a NYLAG financial counselor.

Related Articles