10 Most Common Emergencies Worth Saving Money For
Life has a way of throwing unexpected challenges at us, especially when it comes to finances. Understanding the most common financial emergencies can help you better prepare and create an appropriate emergency fund . Here are some of the most common emergencies you should save money for, along with my tips on how to build those savings in the first place.
Why do you need an emergency fund?
An emergency fund is your financial safety net. The question is not if you will need it, but when. Unlike other savings methods, your emergency fund is a cash reserve intended for unplanned expenses or financial hardships, such as job loss, a medical emergency, or unexpected but urgent car or home repairs.
Beyond the upfront costs of specific emergencies, targeted emergency savings will help you:
-
Prevent the accumulation of high-interest debt
-
Reduce financial stress and anxiety
-
Maintain your standard of living in difficult times
-
Allow time to make thoughtful decisions rather than hasty ones.
-
Don’t let small emergencies turn into major financial crises.
Most Common Financial Emergencies
Digital personal finance company Achieve asked consumers about various financial concerns they’ve experienced in the past year. According to survey results , here are the ten most common financial emergencies and what those emergencies looked like from a financial perspective.
Medical problems
What to expect: Even with insurance, emergency medical care can cost thousands of dollars in deductibles, copays and out-of-pocket expenses. Chronic conditions may require ongoing care and medications.
Typical costs: $1,000–$5,000 or more per emergency department visit; $2,000-$10,000+ for surgical procedures
Loss of a job or decrease in income
What to Expect: In addition to the immediate loss of income, changing jobs often comes with gaps in health insurance and additional expenses, such as COBRA benefits or job search costs.
Typical costs: three to six months of living expenses; potentially more in specialized areas or during economic downturns
Car problems
What to expect: Vehicles may require unexpected repairs or replacements, affecting your ability to work and perform daily responsibilities.
Typical costs: $500-$2,000 for major renovations; $5000+ for replacement
Bank commissions and fines
What to Expect: Overdraft fees and late fees can quickly add up to significant costs.
Typical costs: $30–$100 per incident; may multiply if multiple accounts are affected
Home renovation and replacement of household appliances
What to expect: Important systems such as HVAC, plumbing or major appliances can fail without warning.
Typical costs: $250-$1,000 for appliances; $1000-$10000+ for major home renovations.
Death of a family member
What to Expect: In addition to the emotional trauma, death can result in unexpected funeral expenses and potential loss of family income.
Typical expenses: $7,000-$12,000 for a funeral.
Become a caretaker
What to expect: Caring for an adult family member may involve reduced work hours, use of medical equipment and home modifications.
Typical costs: vary widely; often includes both direct costs and lost revenue
Legal issues
What to Expect: Legal representation, court fees and possible settlements can create a sudden financial burden.
Typical costs: $2,000–$10,000+ depending on complexity.
Victim of a crime
What to Expect: Property damage, theft or fraud can result in immediate expenses and long-term recovery costs.
Typical costs: vary widely; may include insurance deductibles and security upgrades
Divorce or separation
What to expect: Legal fees, separate housing expenses, and division of assets can put a strain on your finances.
Typical costs: Over $15,000 for a contested divorce; additional costs for individual households
How to create your own emergency fund
A typical rule of thumb is to aim to have six months’ worth of living expenses in your emergency fund. If that seems like too unrealistic a goal for your current financial situation, another benchmark for what’s considered a “starting” emergency fund is roughly one month’s rent plus your insurance deductible. When you calculate this number, factor in expenses such as housing, food, utilities, insurance, transportation and debt payments. Non-essential expenses such as vacations, entertainment, or eating out are not included in your “emergency” calculations.
My number one tip for building an emergency fund is to automate your contributions. Using a high-yield savings account separate from regular checking offers the best combination of increased interest without sacrificing access to your funds. Here’s our guide to choosing a high-yield savings account .
Try to make saving a priority by treating these automatic contributions as fixed expenses. Protect your funds by determining what constitutes a true emergency. It’s money you put aside in case the unthinkable happens, not because you need a vacation (no matter how much I sympathize with that).
Remember that building an emergency fund is a journey, not a sprint. Even small regular contributions add up over time . The peace of mind that comes with having a financial buffer is well worth the effort of building and maintaining your emergency fund. Start small, but start now.