How to survive the unexpected, chapter 2: The importance of an emergency fund

Who would have thought that this spring, we'd spend more time looking up bread recipes than enjoying our regular latte at our favourite coffee shop? Although some people have continued to work during COVID-19, others have had to dip into their savings, turn to government benefits or rely on help from friends and family to make it through.

Of course, pandemics are pretty rare. But there are lots of other things that can catch you off guard: your roommate moves out, leaving you to cover the rent; your car’s AC breaks down on the hottest day of the year, you have to bring your cat to the vet for an ingrown toenail… You can’t plan for any of this, of course, but there are still some easy, practical ways to deal.

1. Put aside money regularly

Set an amount to come off each paycheque at X frequency. The first step is seeing how much you can save. Start by writing down all your sources of income and then sort your expenses (fixed, variable, non-essential, debts, and so on). Once you have an idea of what’s coming in and what’s going out, you can adapt your budget based on what you want to save using our budget calculation tool - Cet hyperlien s’ouvrira dans une nouvelle fenêtre..

2. Set up a savings account, if you don’t already have one

This will be your emergency fund. You can name it “Unexpected Expenses,” “Safety Cushion”—or anything you want, really. The key thing is that the money you put in it be used only for emergencies. The Hop’n S@ve tool - Cet hyperlien s’ouvrira dans une nouvelle fenêtre. can help you easily create your savings goals.

3. Automate your savings

It’s so easy! To set up your automatic transfers in AccèsD - This link will open in a new window., simply: select Transfer, then Transfer between accounts, and Later. You can then choose how often you want to make the transfers. And there you go! You don’t have to give it another thought, the money will automagically be transferred.

So you don’t panic the next time you’re hit with an unexpected expense, it’s best to have the equivalent of 3 months of emergency savings. It takes a while to save up that much, but you have to start somewhere. And in any case, it’s not so much the amount that matters (well, you’ve got to have some!), but how consistently you save. The simple act of saving regularly and knowing that you have some money set aside will reduce your financial stress. It’s a matter of habit, and it allows you to stay focused on your short-, medium- and long-term goals.

Once you have enough in your emergency fund, you can get to work on your goals. And there’s nothing stopping you from thinking about them right now.

Who knows—you might find tracking your balance just as interesting as checking out the latest Instagram stories!

Desjardins is here for you

Our 18- to 30-year-old members are eligible for several different support measures, including over-the-phone psychological and legal support. Go to desjardins.com/ca/covid-19/youth - This link will open in a new window..

Recommended for you