How to Save Smarter for Emergency Funds (and Life’s Big Moments)
Key Points
Set a realistic goal, tailored to your situation (income, expenses, timeline etc.)
Open a dedicated savings account as a secure place for your funds
Looking for a hands-off approach? Automate your savings for consistent, regular contributions
Leverage a trusted digital tool to help you track spending and budget effectively
Pro Tip: Choose an account with a high everyday interest rate to maximize your savings growth and no monthly fee eroding your funds over time.
Being financially prepared in a pinch can provide future you with peace of mind during an emergency. But future-proofing your finances doesn’t just help you out down the road. It can also instill confidence during your most stable times, knowing you’re prepared for any financial emergency, from a busted appliance to an unexpected job loss.
If setting aside a large sum of money feels daunting, that’s fair! But it’s actually accessible when you have simple steps in place and take advantage of opportunities to accelerate your savings.
It may be helpful to think of building your emergency fund as a balancing act—you want to be responsible now, so you don’t look back regretting that you didn’t save more, but also give yourself room to live a little and enjoy the money you work hard for.
So, what does preparation look like? Great question!
Planning for unexpected situations
Nobody wants to be caught off guard financially, especially if you’ve got other people who rely on you.
And while we can’t control or predict every event in life, we can plan for the unexpected.
Having access to dedicated savings doesn’t just help you out of a tight spot, it can also help prevent you from making regrettable financial decisions, like taking on additional credit card debt or high-interest loans. These choices can help you in the short term but cost you in the long term.
The type of account you choose also matters. An emergency fund needs to be stable, consistently growing with a high everyday interest rate (so you’re not doing all the work to reach your savings goal faster), and most importantly, accessible when you need it.
Step-by-step guide on how to build your emergency fund
Step 1: Identify your savings goal
There isn’t a one-size-fits-all approach to building an emergency fund. But that doesn’t mean you can’t set a goal that makes sense for you.
The general rule of thumb is to have enough set aside to cover at least 3 months of non-negotiable essential living expenses (we recommend striving for 6 to have additional peace of mind). That could include your rent or mortgage payments, vital utilities (like electricity and water), monthly insurance/service bills, groceries, and transportation. For example, if you were to lose your job, 3-6 months gives you breathing room so that your budget is one thing you don’t have to worry about while getting back on your feet.
Step 2: Determine how much you should be contributing on a monthly basis
Setting money aside isn’t always easy, but taking it step by step makes it more manageable and less intimidating. And do yourself a favour, keep the amount and timeline realistic (opens in a new window). It may help to think of this as a project you chip away at, rather than a scramble to catch up.
Start by looking at how much you earn.
Determine the total amount your household regularly brings home each month after all deductions (like taxes, pensions, and benefits).
List and tally all your recurring, non-negotiable monthly costs (like housing payments, utilities, transportation, and groceries).
Now subtract your total monthly expenses from your net monthly income. The remaining amount is your discretionary income, which you can use for spending, saving, or investing.
As a general rule of thumb, you’re going to want to put aside at least 5% of your monthly income, but committing to 10%, if comfortable, can make a substantial difference on your savings journey.
Don’t forget to leave a realistic amount each month for discretionary spending on things like entertainment, clothing, or other items on your wish list, ensuring it aligns with your overall savings goals.
Pro Tip: You can expedite this timeline with a competitive high interest rate to help your money grow faster! Keep reading for more on this.
Step 3: Separate saving from spending
Keep your emergency fund easily accessible and clearly designated for savings. This helps prevent frivolous spending and ensures your funds are ready when an emergency strikes. Consider an account that allows you to allocate specific funds for savings, offering both growth and immediate access.
Pro Tip: The next time you receive a raise, tax refund, or bonus, you can top up your fund more quickly without stretching your regular budget.
Preparing for life’s big moments
It’s not just emergencies that require some financial foresight.
Whether it’s a vacation or picking out the perfect engagement ring, life moments shouldn’t be derailed by lack of preparation.
Just like planning out and pulling off your emergency fund, you should consider what these costs may look like and the saving timeline you’ll require. And if you’re saving for multiple things at once, you may need to adjust your budget and timelines.
Pro Tip: The PC Money™ Account provided by PC Financial® offers an optional savings feature that lets you keep your spending balance and savings funds separate. Compartmentalizing your funds this way can help you track your progress toward your savings goal and deter you from inadvertently dipping into your savings.
Pssst… keep an eye out for a future blog that digs deeper into saving for the moments you’ll cherish forever!
Using an everyday savings rate as a tool for accelerated growth
If putting your savings aside is a “step” in the right direction, putting it in a high everyday interest savings account is a “leap”!
If you read our How to Calculate Interest on your Savings (opens in a new window) article, then you already know that a consistently competitive, everyday rate can help you reach your goals faster through compound interest. This is particularly beneficial because, unlike temporary promotional rates that often expire after a short period, an everyday rate provides stable and reliable growth for your long-term savings.
Utilize digital tools
Building a robust savings fund isn't just about putting money aside; it's also about managing what you spend so you have more to save.That’s why it's important to track your spending (opens in a new window) as you build your emergency fund—but you don’t have to do it on your own. There’s plenty of digital tools you can lean on, like the Insights Tool in the PC Financial® app. It’s a financial dashboard that can help you understand your spending habits and make smarter budgeting decisions—without any complicated financial jargon.
By turning your transaction data into clear visuals and practical info, it can help you build a budget that reflects your real life (and makes sticking to it easier).
Having all this information in one place can be a gamechanger, helping you adjust your habits to keep more money in your pocket and reach your goals faster!
Ready to start future-proofing your finances? Open a PC Money™ Account today.
Taking the first step forward is easy. Sign up today and join thousands of customers earning over $700 in value every year†.
We’re not like other banks
Earn 2.7% high everyday interest2 on your savings, with no catches and no promo period, so you can grow your savings faster!
No monthly fee1 eating away at your hard-earned money
No minimum balance because everyone deserves our best everyday rate.
No time commitment so you can access your money when you need it (kind of the whole point, right?).
Ready to get started (opens in a new window)?
General information not about PC Financial® products is provided for your reference and interest only. The above content is intended only to provide a summary and general overview on matters of interest and is not a substitute for and should not be construed as the advice of an experienced professional. PC Financial® does not guarantee the currency, accuracy, applicability, or completeness of this content.
1Information about fees for special requests and services for the PC Money™ Account is available here.
2Interest is calculated daily at the current rate on the total closing savings balance in the PC Money™ Account and paid monthly to the savings balance. It is a simple interest calculation. Interest rates are annual and subject to change without notice. Visit pcfinancial.ca for current rates and more information.
†Value shown is for illustrative purposes only. Individual results may vary based on individual savings, deposits and purchase behaviour. This calculation includes regular engagement with the PC Optimum™ program, offers and promotions, with points earned converted at a redemption rate of 10,000 points = $10 worth in rewards.
Getting $700 back in value annually can be achieved with the following:
Earn up to $60 back in points annually with automatic payroll or pension direct deposits: Earn a monthly bonus of up to 5,000 PC Optimum™ points when you make a deposit to your PC Money™ Account using automatic payroll or pension direct deposit. Payroll or pension deposits totaling between $1,500 and $2,999 within a calendar month will earn a bonus of 2,000 PC Optimum™ points, and deposits totaling greater than $2,999 will earn an additional bonus of 3,000 PC Optimum™ points, for a maximum monthly bonus of 5,000 PC Optimum™ points. Limit of one bonus per customer, per month, even if you have multiple PC Money™ Accounts. Only automatic payroll or pension direct deposits qualify for this bonus. Interac e-Transfer® services, electronic funds transfers, and other forms of deposits or transfers to your account are exempt from this offer. The classification of a direct deposit as a payroll or pension direct deposit is determined solely by President’s Choice Bank. Bonus points earned will be awarded to your PC Optimum™ account within 2-7 business days after you meet the minimum direct deposit amount(s).
Earn up to $60 back in points annually when completing up to five bill payments: Earn a bonus of 1,000 PC Optimum™ points for each bill payment of $50 or more, made to unique payees, up to a maximum of five bill payments, per calendar month. Payments must be made using a valid PC Money™ Account. Bonus points earned will be awarded to your PC Optimum™ account within 2-3 weeks of a successfully processed bill payment.
Up to $80 back in points annually when you use the PC Money™ Account as your primary spending account: Based on a monthly spending estimate of $1,166.67 (with 15% spent at eligible stores and 85% spent everywhere else). Estimate is based on 2024 annual purchase data of PC Money™ Account holders who use the account as their primary spending account. Earn at least 5 PC Optimum™ points per dollar on qualifying purchases with your PC Money™ Account, wherever your card is accepted. Earn 10 PC Optimum™ points (5 regular PC Optimum™ points plus a bonus of 5 PC Optimum™ points) per dollar on qualifying purchases at participating Loblaw banner stores, Shoppers Drug Mart® stores, Joe Fresh® stores, and Esso™ and Mobil™ stations in Canada. Bill payments, electronic funds transfers, account fees and interest are not qualifying purchases for the purpose of earning PC Optimum™ points. PC Optimum™ points will be deducted for any credits or returns. President’s Choice Bank reserves the right to cancel, change or extend regular and bonus points earning rates at any time. Account must be in good standing at time of qualifying transaction and awarding of points.
Up to $12 in savings annually from Foreign Exchange (FX) fees. Calculated based on an estimated monthly spend of $40 at a 2.5% FX fee.
Up to $203 in savings annually: Estimated savings on monthly fees is based on an average of moderately priced, unlimited transaction chequing accounts at the big 5 Canadian banks. Some banks may rebate or waive monthly fees for customers who hold multiple products or maintain a minimum account balance each month.
Earn up to $293 in interest per year: Estimated interest earned on your savings balance is calculated using a simple interest calculation and assuming a minimum annual interest rate of 2.25% and a minimum daily closing savings balance of $13,000.
