Why Every Household Needs an Emergency Fund
Why an Emergency Fund Matters
An emergency fund is your financial safety net—designed to catch you when life throws the unexpected your way. Whether it’s a car repair, job loss, or medical expense, having money set aside gives you more than just security—it gives you options.
According to a Finder study, one in four Australians has less than $1,000 in savings. That’s not much when faced with an emergency. Without a financial buffer, even small surprises can turn into long-term financial setbacks.
How Much Should You Save?
There’s no one-size-fits-all number, but a good rule of thumb is to aim for three to six months’ worth of living expenses. Consider:
🔹 Rent or mortgage payments
🔹 Utilities and groceries
🔹 Insurance premiums
🔹 Transport and healthcare costs
For example, if your monthly expenses are $4,000, your emergency fund goal might be $12,000–$24,000. If that feels overwhelming, start smaller—just $1,000 can still make a meaningful difference.
Use a tool like the Moneysmart Savings Goal Calculator to set your own target and track your progress.
Where Should You Keep It?
Accessibility is key. Your emergency fund should be:
🔹 Separate from your everyday account
🔹 Easy to access in a hurry
🔹 Earning some interest (look into high-interest savings accounts or online saver accounts)
Avoid tying this money up in long-term investments like shares or term deposits—you don’t want your emergency fund losing value or locked away when you need it most.
Building Your Fund – One Step at a Time
You don’t need to fund it all at once. Set a regular, manageable savings target—say, $50 or $100 per week—and treat it like a non-negotiable bill.
You can also:
🔹 Redirect tax returns or bonuses straight into savings
🔹 Trim recurring expenses (subscriptions, dining out, etc.)
🔹 Use banking features to automate your savings
Small, consistent contributions can build up surprisingly quickly.
Peace of Mind, No Matter the Season
An emergency fund isn’t about pessimism—it’s about preparedness. It means fewer sleepless nights and more freedom to make good decisions when things don’t go to plan.
At Poole Advisory, we help clients across Bowral, Sydney and the Southern Highlands design financial strategies that are practical and personalised—including building buffers for life’s “just in case” moments.
Need help establishing or managing your emergency fund? Get in touch today or book a conversation to start building your financial resilience.
Compliance Disclaimer:
This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns.
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
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