11 Ways to Build an Emergency Fund from Scratch

September 17, 2020

For sure this is not the first time you encountered the word emergency fund.11-ways-to-build-an-emergency-fund


Financial experts agree that building an emergency fund is crucial to grow wealth and achieve financial freedom. If you are reading this post because you want to build an emergency fund for your own, good for you!


You are now one step closer in building a strong financial framework for life.


An emergency fund is money set aside for unforeseen events. We all know that emergency exists. And they are much likely to happen in a day or time we all can’t predict.


Life without an emergency fund is basically putting your finances in danger. When an unexpected expense happen and you need money fast, you’ll definitely be in a difficult situation.


How will you pay for an emergency?


  • You have no other choice but to borrow money from others
  • Use your credit card Take a loan (SSS, PAG-Ibig or salary)
  • Sanla ATM
  • Five-Six


Huwag naman sana.


That’s why today we will learn the 11 ways to build an emergency fund from scratch! My end goal in making this post is to help you get started and stay with you in the succeeding steps of the way.



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Build An Emergency Fund Today, So You Won’t Worry Much About Tomorrow


I’ve always been open how much my emergency fund is. You can check my latest recap and extra income report for it.


I started saving up for it in 2014, but only manage to finally finish it last June 2020


It is a discipline to save money, more so to save for an emergency fund. After all you need to be very strict on where the money from this buffer account will go. It should only be for emergency situation, and emergency situation alone.


Your emergency will be your first line of defense in the following situation:

1. Losing your job. A safe and secure job is not for everyone. No matter how stable you think your job is, there’s always a room for mistakes and room for sudden reshuffle, unwanted layoff and the like. If you lose your job tomorrow, how will you (and your family) survive

2. Sickness in the family. A sickness in the family can make a sudden difference in the overall household finances. Not to mention the emotional stress the situation will bring.

3. Accident or death in the family. This is another traumatizing situation that may happen to any family. An emergency hand can help you make it through. Getting a life plan can also be a good option.

4. Car repair. A car is an asset that needs to be maintained. There might be a day you encounter problem with your car and will need money to pay the bills.

5. Unexpected disaster or catastrophe. Nothing is worse than losing your home. With an emergency fund set aside you’ll be in a better position once your house is hit by a typhoon or fire.


So if you think you don’t need an emergency fund, think again!


Emergency funds will give you the peace of mind the for bad time. It will prevent you and your love ones from being broke or getting in debt. It will definitely save you from getting depressed and unstable at night.


Here’s the deal: “If you build an emergency fund today, you won’t worry much about tomorrow.”


How much should your emergency fund?

Your emergency fund should be equivalent to 3-6 months of your monthly income. Why?


Because an emergency fund is supposed to make sure that you still have enough savings to live in the next three to six months – enough number of months until you get a stable source of income or until you can fully recover.


Of course your emergency fund can be bigger than the suggested amount, but never lower.


Another factor is when you have debt.


Debt is cutting your way to financial success so the earlier you become debt-free the better. I recommend putting money to get rid of your debt too. Lower your emergency fund goal to at least Php 10,000 and focus on paying-off your debt.


As you finish a certain debt, put the allotted money on your emergency fund instead. You will be surprised how you can get debt-free and build a proper emergency fund fast.



Where should you put your emergency fund?

The simplest answer to this question is this…


Keep your emergency fund in the safest and the most accessible place it could be.


You want your buffer money to be readily available if an emergency happen. You also want it to be safe and protected as well.


A dedicated savings account is the closest thing I could think of for a good place to safekeep your emergency fund. It could be a normal savings account from local bank you trust.


BPI Save-Up Plus Insurance is also a good option since whatever money you have on the account will be multiplied 5x more in case of sudden accident, dismemberment or death.


Although I decided to close my BPI Save-Up Plus Insurance last year, I do believe it is a very helpful product from BPI and I’m glad they offered it to Filipinos.


Places you should avoid in keeping your emergency fund are the following:

  • Under your pillow or on a piggy because it might get stolen
  • Stock market because it is too risky
  • Buying branded shoes and bag just to resell it at times of emergency. Yung totoo?

Who Needs an Emergency Fund?

ALL OF US needs an emergency fund as all of us can encounter an unexpected bump in the road. But if you are looking for solid reasons then remember the following:


1. You are working toward a goal like owning a car, a home or starting a business

2. You or someone in your family have medical issue

3. You are only relying on one income

4. You are trying to get out of debt

5. You are focused to be financially at peace


The Difference between savings and emergency fund

When it comes to savings fund, you have a specific reason and deadline why you save. It could be for your wedding next year, your dream car, your birthday dinner with family or your trip abroad.


When it comes to an emergency fund, the reason and deadline is “the unknown”. You may need the money later, you may need it tomorrow, next week or next month. And the reason is unexpected.


So if there’s an ideal hierarchy it should be saving for an emergency fund first before saving for a big purchase.


Related : How To Save Money Each Month – A Definitive Guide for Pinoys


11 Ways to Build an Emergency Fund from Scratch

1. Automate

This tip shouldn’t come as a surprise to you all. I call automation as the magic ingredient in building wealth.


Since auto deduction does not really apply in local banks, what you can do instead is psyche yourself in transferring x amount of money every pay day for your emergency.


Keep a tracker in a notebook or on your phone’s notepad so you are in sync with your savings.


2. Start small

Don’t get overwhelmed by the number. If your monthly income is Php 25,000, you don’t have to build an emergency fund of Php 75,000 or Php 150,000 upfront.


You can begin with a baby emergency fund instead like a good Php 10,000 to be exact. I’ve discussed this particular topic in my Dave Ramsey’s Total Money Makeover for Pinoys post.


What you can do is to automatically transfer as little as Php 1000 every paycheck to your emergency fund.


In less than six months you will secure your own baby emergency fund already. Seeing that small buffer money grow will motivate you to save more.


3. Reduce a particular expense

If you are really serious to build an emergency fund then you won’t mind reducing your monthly expenses.


Study your cash flow and see what expenditure you can stop for a while. It could be gym membership, subscription to Netflix/cable or perhaps the weekly food delivery.


Instead you can exercise at home, watch regular TV channels and cook at home. It may be an added task and time allotted on your part but the money you save can be put directly to your emergency fund.


4. Get a life plan

It can be a morbid thing to buy yourself a life plan but nowadays it can be a practical and wise investment to have. Each of us in the family have our pre-need plan secured with St. Peter.


Paying for a life plan is also a good form of emergency fund. At least you know that if a sudden death happen in the family, you already have a pre-need plan to take care of it.



How To Avail a St. Peter Life Plan

St. Peter Life Plan – Is it worth the investment?

I'm Just 21, do I seriously need a life plan?

5. Use your bonus or 13th month pay

An easy way to build emergency fund from scratch is to devote any bonus you get. From merit increase, salary increase, regularization pay to 13th month pay! Bonus pa if you have 14th or 15th month guaranteed.

Related: 9 Smart Ways To Spend Your 13th Month Pay


6. Start a side hustle

Get a second job. Sell your skills and talent as a freelancer. It doesn’t have to be complicated as long as it give you extra cash each month.


As a starter you can…

  • Create resume for others
  • Design invitation
  • Build a blog or redesign it
  • Be a freelance content writer
  • Work as a virtual assistant
  • Join affiliate programs like Canva


The sudden increase in your income will help you build an emergency fund fast.


7. Sell your preloved items

Look around your home or your room and assess whether there are key items you can still resell. It can be anywhere from clothing you don’t wear anymore to books and shoes that are not in use.


Put up a small garage sale or sell online instead. The money you make from selling your preloved items can be used to finance your emergency fund.



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8. Join a saving challenge

Have you ever participated in a saving challenge?


Saving challenges are good way to adapt the habit of saving money. You have all the motivation to save every extra cash you have because the end goal is clear.


Is joining a savings challenge a wise way to build an emergency fund?


Depends on how committed you are. I tried doing the 52-week money challenge before kaso FAILED. Some saving challenges you can try to build your emergency are the following:

  • The No-Spend Challenge. In this challenge you cannot spend any money on nonessential items for a whole month.
  • The 52-week Money ChallengeRhea Mocorro of Kuripot Pinay localized the 52-week money challenge and became widely popular every year. The idea is very simple, on week 1 you save 50pesos, week 2 100pesos, week 3 150pesos and this continues to increase based on your starting amount until week 52. If you succeed your total savings for the whole year will be as high as 68,900pesos! You can read more about this in Different Ways You Can Apply the 52-Week Money Challenge
  • Invisible Money Challenge – I’ve done this challenge last year and continued it for 2017. It is very doable for those who want to save money each month. You choose an amount you will treat as an invisible money. For example every 50pesos that come in your hand/wallet are automatically considered as invisible money. You need to put those bills directly on your savings or alkansiya.
  • The Jar/ Bote Money Challenge – Another viral saving challenge at the moment is the jar/bote. You basically dedicate a separate jar/bote for each of your saving goals. Put every amount you have from loose change to proper savings to each jar/bote as part of your short-term or long-term money cushion.


Currently I do the invisible money challenge wherein every Php 20 I accumulate are considered as invisible already. I safe keep them in a piggy bank as part of my short-term savings. This has been the most successful saving challenge I participated.


9. Quit smoking, drinking and unnecessary spending

You will be surprised how quitting your vices and unnecessary spending can boost your overall savings! Bad habits are extremely costly not just for your wallet but for your health too! If you begin saving the money that you would normally spent smoking, drinking or gambling, etc. the faster you can build an emergency fund!


My dad was a previous chain smoker but right after our bunso came he quit. He mention how much he wanted to live a longer life to see our bunso grow old! Now he has been smoke-free for 16 years!


When you are encouraged to do something bad just think of the following:

  • A cup of coffee from specialty shop costs Php 170

Multiply by 30 days, you could have saved Php 5100 already.

  • A pack of cigarette will cost you Php 80

Multiply by 10 packs, you could have saved Php 800 already.

  • A night of clubbing will cost you more or less Php 2000

Multiply by four Saturdays, you could have saved 8000 pesos already.


See how much of your money is wasted on your vices?


10. Gather coins in a jar

This is another great tip to build an emergency fund – every night after work empty your wallet and toss your coins on a jar.


What you can save maybe too small but with every little 1 peso, 5 pesos and 10 pesos you put collecting change, can be several hundred pesos saved someday!


Try it and see for yourself. Once you fill up a jar put the money on a dedicated savings account and start a new one! Make this a habit.


11. Just do it, pay yourself first!

What is the first thing you do when you get your paycheck?


Isn’t it nice that you pay yourself first before allocating money on expenses and other stuff?


As soon as you get your paycheck transfer 500 pesos to your emergency fund! Then you can now pay your needs, your wants and your miscellaneous spending!



Final Notes from SavingsPinay

As always, when it comes to saving and building an emergency fund it all boils down to your willingness and commitment. There is a big debate whether you should save up for emergencies or you should adapt the Y-O-L-O lifestyle.


I don’t judge those who choose the latter. But, I believe in balance. I can’t be at peace knowing I don’t have any money left on my savings. I can’t take a selfie and post on Facebook to show-off if I have debts. A balance of everything.


I hope these 11 ways to build an emergency fund from scratch help you. Good luck!



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Clariza Glino

Izza of SavingsPinay helps Filipinos bridge the financial literacy gap one content at a time by providing insights and tips on budgeting, saving, investing, side hustle and growing your net worth. Aside from this blog she also writes at, a beauty and lifestyle blog for frugal Pinays and manages,, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at

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