Finances, Solid Financial Foundation

How to Build an Emergency Fund During Pandemic

During this COVID-19 Pandemic a lot of Filipino people suffered from unemployment due to lock downs that shuttered a lot of businesses in the country. The Philippine Statistic Authority (PSA) reported that there were 3.5 million Filipinos who were unemployed in October 2021. If you are a parent during this dark season, when you just lost your job or you have the fear of losing your job, you know that it’s not easy. You may be thinking on how to provide for your family for the days or months that you are still looking for a new job and this can really give you stress, anxiety, depression and financial problems.

These things can be prevented if there is an emergency fund in place so that if something unexpected happens in life like when you lost your job or when a family member get sick, your car broke down or your house need repair, you have something to take care of these financial needs without resorting to taking on debts or loans where you will pay a high interest or go to your relatives to ask for help for they too have challenges to face and families to take good care of.

If you are in that situation right now, maybe you are in regrets making those bad decisions with regards to your finances when times were still good. But the good news is, it is not too late. You can start building your emergency fund right now. So let’s discuss Emergency Fund 101. 

What is an Emergency Fund?

It is the money set aside to help us survive an unexpected event or hard times like this pandemic when many lost their jobs, got sick and incurred a lot of medical bills, etc.

Why Do We Need an Emergency Fund?

The reason for having an emergency fund is that we really do not know when will the emergency hit us. So when an unexpected expense arises, we’ll have something that we can take out so we can deal with it without borrowing money or going into debt again.

An emergency fund is sort of like insurance—it costs you some money up front, but it covers you when things go bad. – Dave Ramsey

How Much Should I Save for an Emergency Fund?

It is recommended to start with 3 months worth of your monthly expenses and as you become established, work your way up to 6 months to 1 year of your living expenses.

Where Can I Save Money for an Emergency Fund?

This money should be kept in cash or in a safe investment where the money holds its value or is guaranteed, so that when the time comes that you need it, it’s there! For our family this is how we keep our emergency fund. 

  • 1 month worth of expenses is in Cash
  • 2 months of expenses is in online bank with higher interest like TONIK, CIMB , MAYA etc. 
  • 9 months of expenses is in MP2, M.O.S.T 18 Premium Deposit Fund , Money Markets and Foreign Currency Savings or Time Deposits . They grow our money and at the same time guarantee its value.

How to Build an Emergency Fund

Maybe this is the question that you are asking yourself . You will tell yourself that your salary is not enough or maybe, that you are no longer receiving salary because you just lost your job. The good news is, there are still ways on how you can earn money to  take care of your bills and family’s living expenses. Below are just some of the examples:

  1. Make a budget and stick to it
  2. Decrease your expenses and live below your means.
  3. Save at least 10% of your income for an emergency fund.
  4. Increase Cash Flow 
    • Sell Your Stuffs
    • Be an Online Seller
    • Be a Rider
    • Apply for a part time or Full Time Online Job
    • Tutor /Online Teaching
    • Sell your skills
    • Sell Food
    • Offer Pabili Service
    • Etc. 

Start Your Emergency Fund Now

If you have not yet started building your emergency fund, I encourage you to start it now! You’ll have a peace of mind if you have an amount of money set aside for an emergency. Don’t let yourself be caught off guard. 


Love Lots, 

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