Last Modified: 2026-08-12

Building an Emergency Fund

TL;DR – Emergency savings can help with unexpected costs

An emergency fund is money kept separate from other savings and used only for financial emergencies, like job loss, medical or dental costs, home repairs, car trouble or unexpected travel.
Having money set aside can help you manage urgent costs while keeping day-to-day expenses on track.
A common guideline is to save three to six months of living expenses in an account that is easy to access when needed.

Bottom line: An emergency fund can help cover unexpected costs without disrupting everyday finances.

Whatever your financial situation, it’s important to be able to be prepared for the unexpected. Financial emergencies are unpredictable and can affect your finances in unexpected ways so, having funds set aside to help cover unexpected expenses could help reduce the financial impact of the emergency.

What is an emergency fund?

An emergency fund is money set aside for unexpected expenses.

It's generally a good idea to set up an emergency fund separately from your other savings and only tap into it in the event of a financial emergency. Financial emergencies can include job loss, medical or dental emergencies, unexpected home repairs, car troubles, and unexpected travel expenses.

Why is an emergency fund important?

Having an emergency fund can help you:

Maintain financial control: By having funds set aside for an emergency, you will be better able to manage your day-to-day expenses in addition to addressing your immediate emergency needs.
Feel more secure financially: Having an emergency fund can help you feel confident that you will be better able to manage financially in the event of an emergency.

How much should you have in your emergency fund?

It really depends on your situation, and may vary based on your goals, your age, your income, and what your expenses are. A general guideline is to have an amount set aside that could cover anywhere from 3 to 6 months of your living expenses. The timeframe you actually choose, will depend on your personal circumstances.

How should you set up an emergency fund?

In an emergency, you will most likely need to access your funds quickly, so keeping them in a savings account, separate from any other savings account you may have, is likely a good idea.

Let us help you get started

For more information about setting up an emergency fund and how that could fit in with your other financial goals, book an appointment with a TD advisor.