Building an emergency fund

An emergency fund beats debt

Unexpected costs happen, like job changes, unplanned repairs, or a large bill you weren't expecting.

An emergency fund means:

• You've got money put aside for when you're thrown a curveball.
• You can focus on fixing the problem, without worrying how to fund it.
• You’re not sacrificing other plans or paying interest on life’s surprises.

Being able to fall back on this money in a crisis rather than dipping into other accounts or turning to borrowing means you don't have to add financial strain to the existing challange.

How much is enough?

A common rule of thumb is three months of essential expenses, but there’s no one‑size‑fits‑all number.

Your emergency fund should fit your life.

Think about:

• your living situation (solo, couple, whānau)
• if you have any dependents (children or pets)
• fixed costs like rent or a mortgage
• whether you own or rely on a car
• any insurance cover you already have.

Decide what counts as an emergency

An emergency is something unexpected, necessary, and hard to ignore. Think about what might trigger you to access this money.

It might include:

• losing your job
• urgent car or home repairs
• medical costs
• a large, unavoidable bill.

Defining this upfront makes it easier to protect your savings, and use it without guilt when you genuinely need to.

Where to keep your emergency fund

Your emergency fund should be easy to access, but not too easy.

You could put it in a separate savings account that's not linked to a card. This keeps it out of everyday spending, and reduces temptation to use it when cash feels tight.

Our Online Call account is a great option for your emergency fund.

You can:

• Build it up with small amounts from each pay or set up recurring transfers so it builds up automatically without your constant attention.
• Access the money at any time by making a transfer to your transactional (Free Up) account.
• Earn interest on it every day so it essentially builds itself too.
• Set a a realistic goal using Goal Tracker to keep you accountable, and make progress feel more real.

If you're in a tax bracket paying more than 28% income tax, open a PIE Online Call instead and pay a maximum of 28% tax on the interest you earn (instead of your usual tax rate).

Once you've hit your goal

Ka pai! You've got a healthy emergency fund now. You can either keep going, for extra security, or stop transferring money into it and put it towards another part of your budget.

Depending on how much you've got and how urgently you might need to access it, you could split it up:

• Keep a portion readily available in your Online Call account.
• Put a portion in a Notice Saver account, earning more interest, with limited access.

This way, your money works harder, without locking all of it away.