How to Build a $2,500 Emergency Fund by 2025

When you don't have much emergency savings, it can be discouraging to think about how far you need to go. Seemingly every expert recommends having at least three to six months of emergency savings in a high-yield savings account. It could take years to accomplish that.

Recent research suggests you might not need nearly so much. A 2019 study found that the ideal emergency fund amount is about $2,500 ($2,467, to be exact). While you may want to save more, a $2,500 emergency fund is a great place to start. It's also a goal you could reach by 2025 if you follow the right steps.

Set up automatic transfers to your savings

The best way to build an emergency fund is to contribute to it every month. You could do that manually, but why take the risk of forgetting or putting it off? Automatic transfers are much easier and more reliable.

Start by setting up your emergency fund in a high-yield savings account. Many savings accounts have a savings bucket feature, also known as a sub-savings account. This allows you to create a sub-account specifically for your emergency fund, so it's not mixed with the rest of your savings.

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Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of January 10, 2025. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of January 10, 2025. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

Next, program an automatic transfer from your checking account to your emergency savings for an amount you can afford. There are about five months left in the year. So to have a $2,500 emergency fund by 2025, you'll need to add $500 per month. If you can't afford that, let's look at a few ways to save more.

Review your typical monthly spending

Pull up your last few months of banking and credit card statements to see where you're spending money. There's a good chance you'll find places you can cut back. Maybe there are subscriptions you hardly ever use anymore, or you realize that you're spending a lot at restaurants.

You don't need to cut your spending to the bone. It's fine to spend money on things you enjoy. But if you're not able to save as much as you'd like for your emergency fund, see if you can trim $50, $100, or $200 from your monthly expenses.

If you'd rather not pore over financial statements, look into budgeting apps. Some apps connect to your banking and credit card accounts, and then recommend areas where you can cut back.

Look for opportunities to earn more

When you want to put more money toward your emergency fund, you have two options. You could cut costs, which we just went over. Or, you could boost your income.

This can be a temporary change to jump start your emergency savings. For example, you may pick up some extra hours at work or dedicate a few hours each weekend to a side hustle. If you're able to work an extra four hours a week at $25 an hour, that's already $100. In five months, you'd almost have enough to build a $2,500 emergency fund from that alone.

An even better option would be to see how you could permanently increase your income. You might negotiate a raise, find a higher-paying job, or launch your own business. Increasing your income is one of the most impactful financial changes you can make, so it's well worth pursuing.

Try a savings challenge

Some people find that it's easier to save consistently if they gamify it. If you think this could help you, there are lots of savings challenges to try.

One popular choice is a no-spend week or month. During that time, you only spend money on necessities. A no-spend challenge can work well if you've been having trouble dialing back your spending. And you can put all the money you save toward your emergency fund.

Even if you're starting from scratch, a $2,500 emergency fund could be a realistic goal by the start of next year. It's also an important one. Having money saved for emergencies protects you financially and gives you peace of mind.