If you’ve ever felt the sting of an unexpected expense — maybe your car wouldn’t start, your phone gave out or you lost your job — then you know the importance of having some cash stashed away as a safety net. An emergency fund is essential to your financial health: It can not only help you calmly manage the crisis at hand but also prevent you from draining your primary savings account, turning to credit cards or borrowing when unforeseen costs pop up. An emergency fund isn’t just money; it’s peace of mind.

How much you should save for emergencies 

While it’s impossible to know exactly how much you may need when you’re hit with unanticipated expenses, a general rule of thumb is to aim for savings equivalent to three to six months’ worth of your essential living expenses. The idea is that you could continue to pay your bills for several months, should you lose your job, for example.

Your essential living expenses would include your housing, food, phone and utility bills, transportation and anything other must-haves for your life to continue uninterrupted. You can set your emergency savings goal with the help of PNC’s Safety Net Calculator.

How to start your emergency fund 

Once you’ve calculated your three-to-six-month goal, you can start saving. These tips may help:

  • Open an account. Your emergency fund should be easily accessible in the event of an emergency, but not so accessible that you’ll be tempted to dip into it for day-to-day expenses. The solution? Open a separate, secondary savings account with a hands-off mindset. To make the most of your savings, research your alternatives in terms of interest earning potential and any minimum deposit or balance requirements or monthly fees that may apply.
  • Get into a positive frame of mind. Your emergency savings goal may look overwhelming at first but remember: You don’t have to reach it overnight! It will likely take you a while to get there. Take one step at a time and celebrate smaller milestones as your savings build.
  • Consult your budget. When it comes to saving, consistency is key. Take a look at your budget and see how much you can afford to put away each (and every!) month. Even a small amount will help you move toward your goal, so give yourself permission to start small and build your monthly contribution as your circumstances allow.
  • Consider automatic deposits. A simple way of making sure you put money into your account regularly is to set up automatic payments from your paycheck or bank account. As those regular deposits build and earn interest, you may be surprised to see how quickly your savings add up.
  • Update your budget frequently. Keep an eye on your budget to see if areas might open up where you can cut back on your spending. When they do, consider putting those extra funds toward your emergency fund.
  • Keep your emergency fund top of mind. Until you reach your savings goal, think of your emergency savings fund first when you come into unanticipated money — gifts from friends or family, your tax refund, a raise, etc. Stash that cash into your emergency fund before you’re tempted to spend it! You’ll thank yourself when you need it. 

When you should use your emergency fund 

With “emergency” right in the name, you already know you shouldn’t take money out of this fund to pay for your day-to-day expenses or “wants” of the moment. Put some thought into your personal definition of what constitutes an emergency so that you’ll be able to recognize one when it arises. Circumstances that qualify may include losing your job, needing to pay for unexpected medical or dental treatment, financing a major car repair (you should include regular maintenance such as oil changes in your monthly budget), replacing broken technology or having to fly home for a family emergency.

If you’re still unsure when an expense comes up, ask yourself these questions:

  • Is this a necessary expense? In other words, will my life be significantly disrupted if I don’t spend the money? 
  • Does this expense need to be handled immediately? 
  • Was this expense unforeseen?

If you answer “yes” to more than one of these questions, you should feel comfortable dipping into your emergency fund. Just remember to replenish it once the crisis has passed and you have the means to start building it up again.