An Essential Guide to Building an Emergency Fund

An emergency fund is money set aside just for real emergencies—job loss, car repairs, vet bills, medical costs—not for vacations or impulse buys.

It’s the buffer between “I’m fine” and “I need to put this on a high-interest card.”

KOHO Essential to Build Your Emergency Fund

If you’re starting from scratch, where you keep your emergency fund matters.

With KOHO Essential Account, you can grow it while still keeping it easy to access:

• It has a low monthly plan fee that can be waived when you set up direct deposit or add +$1,000.

• Use a prepaid Mastercard® for groceries, bills, subscriptions, and travel.

• Grow your savings with a 2% interest savings rate on your entire balance.

• Earn 1% cash back on groceries, eating & drinking, and transportation.

• You can subscribe to Credit Building for $10/month, it's an affordable way to build your credit history.

• Enjoy unlimited transactions and free e-transfers (never worry about fees when sending money to someone again).

How Much Should You Aim For?

Think in stages rather than all at once:

• Starter goal: $500–$1,000 to cover small surprises (a tire, a bill, a broken appliance).

• Next step: 1 month of essential expenses (rent, food, bills, debt payments).

• Longer-term: 3–6 months of essentials if your income is less stable or you want more security.

Even a small emergency fund is better than no emergency fund—start where you are.

Where to Keep Your Emergency Fund

Your emergency fund should be:

• Separate from daily spending so you’re not tempted to tap it

• Safe (not in risky investments)

• Easy to access when something urgent comes up

• Earning interest so it grows a bit in the background

Simple Steps to Build Your Emergency Fund

1. Pick a number

   • Start with a small, realistic target (for example: $500 or one paycheque).

2. Open or dedicate an account

   • Use a separate bucket or goal so your emergency fund isn’t mixed in with “fun money.”

3. Automate it

   • Move a set amount into savings every payday—even $25 or $50 adds up over time.

4. Use it only for true emergencies

   • Car breaks down, fridge dies, unexpected bill? Yes.

   • Concert tickets, sales, upgrades? That’s a no.

5. Rebuild after you use it

   • If you dip into the fund, make a plan to top it back up, even slowly.