Having money for emergencies is about planning for the unexpected. By setting aside funds specifically for emergencies, you can navigate unforeseen financial circumstances with more confidence and security.

Whatever your goals, it’s a good idea to put some money aside for emergencies. Keep this ‘rainy day’ fund separate to your savings and everyday money. As a guide, aim to save up enough money to cover your expenses for 3 to 6 months.

Having money you can access quickly will stop you from having to access credit, which can be costly in the long run, or stretch an already tight budget. Life is full of unexpected surprises, some of them will cost money. For example when your fridge or washing machine suddenly packs it in, or your car needs a major repair.

Keep these funds separate from other savings or spending accounts. If you have a mortgage that has a redraw facility, you could keep emergency funds in your mortgage account to reduce the interest you pay. Similarly, a mortgage offset account allows you to keep funds in a separate account while still reducing the amount of interest charged on your mortgage.

Remember to keep this money for real emergencies and top it up again after you use it.