How to Set Up an Emergency Account

Don’t let this be your only emergency savings! (Photography from

Ah, emergency accounts. No doubt you’ve heard of the importance of having three to six months of living expenses set aside in case of an emergency. What you rarely hear is how to actually save that amount, which is hardly chump change. For the average Canadian family who earns $85,000 a year, that means setting aside between $21,000 and $42,000! It’s an amount to make you want to throw in the towel before even trying. So I asked Stephanie Holmes-Winton, a Halifax-based financial advisor, her thoughts on how we can start an emergency account. Here are her three tips for getting started.

1. Just do it! By that, she means start any way you can. Ideally we’d save 10 percent of each paycheque and the amount would automatically go to a separate account earmarked for savings. But Holmes-Winton acknowledges that saving any amount (even $50 a pay) is better than nothing. Recognize that it will take you a while to save the amount you need.

2. Set up your savings account strategically. By that, Holmes-Winton means don’t attach your debit card to an account, which makes the money too easily accessible for any impulse purchase that may come up. She notes some savings accounts have 24-hour requests before the money can be moved out of the account. “That’s behaviourally helpful,” she says.

3. Recognize that an emergency account is fluid. Does this sound familiar? You actually managed to rack up some savings only to have your car quit or your basement start leaking. The repairs will cost, oh, the exact amount you’ve saved. Back to the drawing board. “Don’t get discouraged,” Holmes-Winton says. “If you are consistently saving, it will build back up.”


Deanne Gage has written about all matters financial since 1999. She writes, edits and strategizes out of her Toronto home that’s partially under construction. Besides money issues, she enjoys running fast, jazz music and drinking a quality glass of Merlot. Her two-year-old daughter is quite familiar with money: she borrows it from mom’s wallet for her toy cash register.








One response to “How to Set Up an Emergency Account”

  1. Great tips, I think everyone should budget and have an emergency fund ideally the 10% or more but anything is better than nothing.