An emergency fund is money set aside for unexpected events like car repairs, medical costs or urgent travel. Many people aim for an initial target of $1,000 because it can cover common short-term expenses and reduce stress when something goes wrong.
How much should you save each week?
Here are examples of how long it can take to reach $1,000 with different weekly contributions:
| Weekly amount | Time to reach $1,000 |
|---|---|
| $20 | 12 months |
| $40 | 6 months |
| $80 | 3 months |
Three simple steps
- Choose a separate savings account
- Make it easy to transfer money in
- Pick a weekly or monthly amount
- Automate the transfer
- Keep the fund for emergencies
- Avoid dipping into it for everyday spending
Why $1,000?
Many common unexpected costs fall under $1,000 such as replacing tyres, fixing a broken appliance or paying a surprise bill. Having this money available can help avoid taking on debt or using credit cards with interest charges.
Pros and considerations
- Less financial stress
- Reduced need for borrowing
- Quick access to funds
- Saving takes time
- Unexpected events can still exceed $1,000
- Requires discipline
Frequently asked questions
Where should the money be kept?
Many people use a separate savings account so money is not mixed with everyday spending.
What if I cannot save every week?
Saving irregular amounts is still helpful because the goal is progress, not perfection.
Should I build a larger fund later?
Some people increase their goal after reaching $1,000 based on personal circumstances.
This article is general information only and does not constitute financial advice, investment advice, legal advice or tax advice. It does not consider your objectives, financial situation or needs.
This article is general information only and does not constitute financial, investment, legal, or tax advice. It does not consider your objectives, financial situation, or needs. You may wish to seek personalised advice from a licensed professional before making financial decisions.