Sometime early in 2019, I had a family emergency that made me close my Sacco account and withdraw all my savings. While I treated this as my emergency fund throughout, it occurred to me last minute that I had not been building an emergency fund all along. I mean, the money was not easily accessible, and it was more of an investment than an emergency fund from the word go.

But that small event got me thinking; what would happen if I lost my job? How long would I survive in the city, paying my bills while looking for another job? So, I started saving small amounts of money where I could easily access the funds without eating into my longterm investments. It was not an easy journey, but less than a year later, the little money I had by then would come in hand when I lost my job. 

My point is, whatever you do, you need to set aside some money that you can count on during emergencies. That’s what we call building an emergency fund. Although it’s hard to scrape some cash off the little you already have, that fund makes you breath easy knowing you’re covered. If this pandemic has taught me anything, it’s how important an emergency fund can be.  

What’s an Emergency Fund

An emergency fund is made up of money you save to get through emergencies. The money in your emergency fund is not for daily living expenses or when you feel you need to get a fancy item or vacation. An emergency fund is a fund or a savings account you can count on in case the below happens;

  • You lose your job
  • Have unexpected medical needs
  • Car accident or breakdown
  • Unexpected house repairs

Steps to Building an Emergency Fund

Set Your Emergency Fund Target

The first step to building an emergency fund is setting the minimum amount you need to for emergencies. The lower the amount, the easier it’s to achieve that goal, then you can increase it gradually. 

Ultimately, an emergency fund should be able to cushion you for at least 3 months to 1 year, depending on who you ask. What the pandemic has taught us, though, is the longer your emergency fund can cushion you, the better. Many people are starting to aim for an emergency fund that cushions them for at least 1 year. 

If your monthly expenses are Kes 25,000.00, your emergency fund should have Kes 75,000 to Kes 300,000 for a 3 month and 1-year emergency fund. 

You Save First

After setting your emergency fund target, the next step is setting a savings goal. How long do you need to build an emergency fund? How much do you need to set aside every month or week to achieve this goal?

Saving should not be an afterthought, but the first thing you do once your salary hits your account. If your salary comes at a particular date, you can set a standing order. However, confirm the charges your local bank has as some tend to have high charges on standing orders. 

Where to Put the Emergency Fund Money

While building an emergency fund requires you to put it in a highly accessible account, it does not mean letting it lay idly in a non-interest earning account. You can consider putting the money in Money Market Account, or a Sacco. If you decide to save in a Sacco, ensure the money is in a FOSA account for accessibility. 

Assess the Account Regularly 

Assess the account and the situation regularly. If you have hot the threshold, then you can start saving the money elsewhere for longterm investments or other wants like a vacation or buying major items like electronics. If you have used the money for another emergency, start saving again to get the emergency fund to the minimum amount required.  

Freeing up Money to Build an Emergency Fund 

When you are relying on your salary to cater to your bills, debt payments, investments, and other savings, it becomes quite challenging to have enough money for an emergency fund. There are four ways that you can free up more cash for your emergency fund. 

Trimming Your Expenses

Cutting down on your expenses will free up some money that you can use to build your emergency fund. Try reducing your phone and data plan bills, grocery, monthly subscriptions, entertainment, and other luxuries. When your emergency kitty is full, you can always go back to these, or even invest the money somewhere else.

Read more on how to start budgeting

Making More Money 

Another way to have more money to save is to make more money through side hustles or monetizing your hobbies. There are many ways to make money online, and these might help you start your freelancing career. You can start monetizing your hobbies like baking, cooking, art and craft, and photography, among others. 

Save Any Windfalls

Reducing one’s budget can be a hard task, especially when living in a large household. If you cannot manage to trim your expenses, you need to start saving any windfalls to grow your emergency fund. Windfalls are any amounts you receive unexpectedly, like tax credits, work bonuses, or gifts in terms of money. 

Sell What You No Longer Use

If there are things in the house you no longer use, you can sell them online. You will be freeing up space in your home and making some money. 

The bottom line is, no matter how hard life is now, it gets worse during emergencies. Having an emergency fund might be the lifeline between surviving the situation or spiralling into debt. If you do not have an emergency fund, this is the right time to start building one. Trim your expenses if you can, start a side hustle, or sell anything in the house you no longer need. Whatever little money you can get, save it in a high-yield account. In no time, your emergency fund kitty will be full and ready to save the rainy day.



  • Marlow marion

    August 26, 2020

    I had to grab my book and paper! Thank you


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