How to Finance a Medical Emergency

An OppLoans E-Book


Katie Ross Education and Development Manager for American Consumer Credit Counseling

The sole purpose of an emergency fund is to help you financially when you are hit with the unexpected. An emergency fund should be used only for urgent situations; those times when you need to keep the lights on and food on the table.

At minimum, you should keep three months’ worth of expenses in your emergency fund, although six to nine months is ideal.

The best way to start saving for an emergency is to direct deposit a percentage or set dollar amount into a savings account every single week. This is the fastest and most efficient way to start saving right now. During tax season, if you get a return, you can put away some of that return into savings. If you work more than one job for extra cash, save the money from job #2. In fact, any income you have that you don’t need for your living expenses should be allocated to building your emergency fund.

You can and should start a savings account even if you are in debt. The whole concept of an emergency fund is to help you when you’re down, and the sooner you can build your savings, the sooner you can work on paying down your debt. Both are important and you will need to balance and weigh your financial situation out.

Ask yourself: How much debt are you in? Can you pay your debt off in a month or is it going to take years? Once you know the answers to these questions, start building your emergency account bit by bit. As you pay down your debt, you can increase your weekly or monthly contributions to your emergency. Again, you need to evaluate your personal situation, and make adjustments as you go along.

K_RossHoward DvorkinCPA and Chairman of

If you don’t have an emergency fund already, you’re running behind schedule. Everyone who’s graduated from high school needs one, because everyone can suffer an accident or an illness.

Listening to experts on the topic of how much to keep in an emergency fund is like owning a Cadillac, a Honda, and a Kia – each car will give you different mileage, even when you’re headed to the same destination. Some experts insist you need a year’s worth of expenses in an emergency fund. Others say three months or six months. I say even a week is progress. I never want to give a hard number, because that might discourage people from even starting.

Saving is like dieting. If you don’t make it part of your lifestyle, you’ll eventually cheat and fail. So saving on a regular basis means saving very little all the time, instead of a lot every paycheck. We’re talking one more brown-bag lunch, and those few bucks you would have spent on takeout going into a savings account.

Saving when you’re in debt might seem like drinking bottled water on a sinking ship. But if you save small amounts constantly, it might also help you focus on paying down your debts.

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