How To Build An Emergency Fund As A College Student

There are many high-yield savings account options but after much research, I chose Jenius Bank because of its high APY, lack of fees and no minimum balance requirement. For my first high-yield savings account, I wanted to focus on allowing my money to grow in an account without having to stress about paying fees or making a certain deposit every month.

The 40-40-20 budgeting rule suggests that 40% go towards necessities like food, rent, and transportation. Another 40% goes toward savings, which can be split amongst retirement funds, emergency funds or paying off debt. The remaining 20% is for discretionary spending, but I roll the leftover amount into my savings if I don’t use that full 20%.

Within my 40% allocated to savings, I put most in an emergency fund and the rest in a retirement fund. As a college student, I choose to put more in an emergency fund since I’m unsure what my post-graduate years hold. I expect to hit roadblocks and want to ensure I have money accessible just in case.

Before I started an emergency fund, I had all my savings in a traditional account. I was using the same saving technique as I do now, but my funds were lumped together without a clear purpose. Now I can better separate my savings and earn more interest on that money.

Starting an emergency fund can feel nerve-wracking, especially if you have checking and savings accounts with different banks like I do. However, once you familiarize yourself with your banking options and make saving a habit, the process becomes much more manageable.

Keep in mind that an emergency fund will look different for everyone. A graduate student balancing rent and other bills might need a more robust emergency fund than an undergrad who lives on campus with most costs covered by scholarships or financial aid. You can always add more to your emergency fund as you progress through life and your financial responsibilities increase.

When building your emergency fund, assess your situation, savings habits and long-term goals. This will help you choose the best strategy for your personal financial needs that will serve you well beyond college.

Here are some tips experts recommend to kickstart your emergency fund:

Create a savings goal

The general rule of thumb is that your emergency fund should equal three to six months of your necessary monthly expenses. However, as a student, you might have more flexibility. Some experts recommend aiming to save $1,000 to get started, but factors like rent, whether or not you have a car, and the price of an unexpected trip home can influence the amount you set to be your goal.

Set a monthly contribution

Choosing a fixed amount to save each month based on your income and anticipated costs can help you stick to a savings routine. To get the ball rolling, you can even save as little as $100 a month. Starting small is better than not starting at all.

Automate your savings

You can set up automatic deposits between your checking and emergency fund savings accounts, so you don’t have to worry about manually putting the money aside. This way, you don’t get the chance to decide to spend the money instead of saving it. This will also help keep you on track to hit your goals.

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