Skip to Content

Emergency Funds: Why Veterans Should Start Saving

At a Glance

Nobody can predict when large unplanned expenses will land on your lap. Whether you need immediate surgery, lose your job or need urgent home repair, it’s always a good idea to have an emergency fund.

An emergency fund is a stash of money set aside for any financial surprises you may endure. Going through a major life event can be stressful and costly, but working on an emergency fund early can help lighten the load. Without the security of an emergency fund, you run the risk of going into major debt.

How Much Should You Save?

The total dollar amount will vary on the person, but it’s recommended to save at least three to six months' worth of expenses. If you’re living paycheck-to-paycheck, it may be challenging to put a bunch of money into your emergency fund immediately. However, saving just a few dollars a month is better than nothing. The earlier you can get started on building your emergency fund the better.

How to Save for an Emergency Fund

Starting an emergency fund can seem daunting if you’ve never worked on your savings before. Saving for the future doesn’t have to be difficult, so let’s get started.

1. Get an idea of your monthly expenses

Knowing the total amount of your monthly expenses is a crucial part of setting up your emergency fund. Keep track of all bills, grocery expenses, gas trips and other necessary expenses for the whole month.

2. Start making budget adjustments

Once you know what you're spending monthly, it’s time to start looking at where you can cut back on expenses. An easy way to keep your budget on track is to download a budgeting app on your phone so you can consistently see how much you’re spending and where.

3. Set a goal

Once you have a good idea of how much you spend a month, it’s now time to set a goal for your emergency fund. As mentioned above, experts recommend keeping three to six months’ worth of cash aside. For example, let’s say your monthly expenses totaled $2500. In this case, you’d want to set a goal between $5000 and $15,000.

4. Decide where you’ll keep your emergency fund

There are several places you can keep your emergency fund, but one of the best places you can put it is in a separate high-yield savings account. You want the money to be there when you need it but not so accessible that you’re tempted to spend the money you’ve saved.

High-yield saving accounts allow for the money in the account to grow over time. Meaning the longer and the more money that sits in the account, the more interest you’ll gain.

5. Create a savings system

Now that you know where you’ll keep your emergency fund, set up a good savings system. An easy way to do this is to set up automatic recurring transfers with your bank. This’ll allow you to build your emergency fund without having to pull the money each month manually.

6. Monitor Progress

Now that you’ve got a plan to build an emergency fund, you can sit back and monitor the progress. Some Veterans may decide to lower the amount they’re putting into their emergency fund once it reaches that three to six-month figure, while others will continue to grow theirs. Keep an eye on the account you set up and recognize how glad your future self will be if they need the funds.

"Emergency savings remains a problem area for many Americans, which leaves them only one unplanned expense away from having high-cost debt," Greg McBride,'s senior financial analyst, said. "Long-term unemployment, stagnant wage growth and rising household expenses are all contributing to this trend. As difficult as it may be to boost savings, having an adequate emergency savings cushion is critical to maintaining financial stability, and Americans need to find ways to sock away more cash for a rainy day."

When Should I Use My Emergency Fund?

In general, don’t be scared to use your emergency funds if you need to. Not everything will fall into the “emergency” category. But, even if it’s not a trip to the emergency room, your emergency fund could be beneficial in paying off a medical bill that your insurance doesn’t cover.

What is deemed an emergency may differ from person to person, but remember you set this money aside to prevent yourself from going into debt from an unplanned expense.

Emergency Financial Assistance for Veterans

If you’re looking for urgent financial assistance and have not yet set up an emergency fund, there are a few options specifically designed for Veterans. Veterans Families United provides a list of emergency financial assistance for Veterans here.

About Our Editorial Process

Veterans United is recognized as the leading VA lender in the nation, unmatched in our specialization and expertise in VA loans. Our strict adherence to accuracy and the highest editorial standards guarantees our information is based on thoroughly vetted, unbiased research. Committed to excellence, we offer guidance to our nation's Veterans, ensuring their homebuying experience is informed, seamless and secured with integrity.

Enter to win $100,000 toward your new home! No purchase necessary; see official rules for details.