If a sudden expense pops up, do you have an emergency fund to cover it? According to the 2025 Financial Wellness Survey released in January 2025 by U.S. News & World Report, more than 40% of Americans would answer “No.” 

We realize that life sometimes throws unexpected curveballs at us, like emergency medical bills, car repairs, or urgent travel when a loved one gets sick. The U.S. News & World Report survey found that 60% of people have faced an unexpected expense in the past year. 

But 42% of those surveyed (and half of all women surveyed) said they don’t have a way of covering a sudden $1,000 expense with savings or cash. Without available savings, many people resort to using high-interest credit cards to handle emergencies, leaving them with debt that keeps on snowballing.  

If you don’t already have an emergency fund, this is the year to build one. 

How Much Do You Need?

Even a small emergency fund can bring you peace of mind and make unexpected expenses less stressful. 

According to the credit reporting company Experian, a healthy emergency fund will cover your basic living expenses (rent or mortgage, utilities, food, transportation, and any child/pet care costs) for three to six months. 

If that sounds difficult to do now, don’t worry. You can set an initial goal of building a fund to cover your expenses for one month. Once you reach that goal, you can keep adding from there. 

How to Start Your Emergency Fund

You can start small, by making a detailed list of all your expenses — even the tiny ones — and looking for ways to cut costs.

Every dollar you can avoid spending is one you can add to your new emergency fund. The more you track where all your money goes each month, the easier it will be to find creative ways to spend less. 

You might arrange to carpool with a friend for trips to the grocery store and other errands, so you each can buy less gas. Or take a look at the streaming services and apps you pay for to see if there are some you don’t really need. Cancel them, then put any money you’re saving into your emergency fund. 

On the flip side, you can also look at ways to earn more. What if you search through your home to gather unwanted items for a yard sale? Arrange to host a group yard sale with neighbors on the same day, perhaps later this spring once the weather warms up. Take any money you earn from your sale and add it to your emergency fund. 

Another option: Some people can earn more by trading babysitting services with a friend so that each person can fit in a few extra overtime hours at work. 

Along with spending less and finding creative ways to earn more, one quick solution for kickstarting an emergency fund is taking out a small personal loan at a fixed interest rate. This can be especially helpful for those currently without savings or access to traditional banking services.

Unlike a credit card, a personal loan will come with predictable monthly payments on a reliable schedule, always for the same amount — no surprises. You can make sure that you only borrow an amount that will include set monthly payments you know you can afford. 

You’ll receive the money and put it into a savings account, so you can rest easy knowing that you’re prepared for emergencies. 

Personal Loan Assistance: Start Your Emergency Fund with 1st Franklin Financial

If you have questions about emergency funds, budgeting, or using a personal loan to start your rainy day savings, the “Friendly Franklin Folks” are here to help. Drop by your local 1st Franklin Financial branch or give us a call. We’re here to help you make 2025 your best financial year ever!