An Emergency Fund is used to help smooth out the potholes in life. A fully funded EF has about 3-6 months of expenses saved up. I only plan to use it when something unplanned happens e.g. car breaks down, medical, job loss, etc.
When I get paid every 2 weeks I transfer $50 from my Bank of America checking account to my BOA savings account. I have it set up so that it’s easy to get to because it’s for emergencies. If something unplanned happens and I need it right away I can’t wait for 3 days to have it transferred from my ING account. I also have it set up that way because BOA has Keep the Change, so every purchase I make gets rounded up and the change gets transferred to my savings account. As a result I have the $100 a month I put in it plus all of the extra change that gets put in which makes it grow that much faster.
If you don’t use BOA or your bank doesn’t have a program like that, just set up an automatic transfer of $5 every 3 or 4 days. You won’t miss it.
How do you have your emergency fund set up?