We all believe “it won’t happen to us”. Well it’s more of a hope than a belief, but it stops us doing anything about building up an emergency or rainy day fund.

80% of all households in Britian had an unexpected expense last year, and with 1/3 of the population (20million people) having less than £500 savings, we are only making the situation worse for ourselves.

The only sure things in life are death, taxes and BILLS. So if you ever have the bad luck of getting your important things stolen, crash your car, unexpectedly fall pregnant or get made redundant at work – more than likely the bills will still come in.

Don’t panic, it’s not hard to get yourself sorted for an emergency and then if nothing happens great, you have a little nest egg to grow!

How much is enough?

A comfortable secruity blanket is between three to six months worth of outgoings (rent, bills, essential spending) and you should keep this fund in a completetely sperate account to your current account, so you aren’t tempted to dip into it.

However your funds should be easily accessible and not tied up into a long term desposit scheme, as usually you will need them quite quickly.

Building my emergency fund

A good way to make sure your emergency fund is working for you, is to open a good ISA account (Help to Buy would be a good option if you are looking to buy your first home) and start to store your money in there.

The hope is that you won’t have to touch your emergency fund, and so it will act as a deposit for your first home, but if you do need it, it can be accessed easily and you don’t loose anything.