6 Starter Tips For Building Your Emergency Fund : April 2020 Budget Update

Emergency Fund Tips

The Easiest Ways To Start An Emergency Fund

Preparing for financial emergencies is not something you should put on the back-burner as many Canadians are currently experiencing.

Searching for an emergency fund loan during times when you are broke or falling behind paying bills is not a savvy position to be in.

This is why I’ve been vocal about the critical nature behind the necessity of an emergency savings account.

Ideally, you don’t want to prepare for a financial emergency while you are in the midst of one.

Who has time to think about saving money when creditors are calling and eviction notices are being posted?

Not many people because panic and stress take over and likely your only concern is finding money.

Starting An Emergency Fund

For those of you who don’t know how to start an emergency fund let me show you my starter tips.

I don’t want you to think that the process of building an emergency fund is hard when it’s not.

Most people tend not to start an emergency fund due to a negative mindset when it comes to their financial situation.

Telling yourself that you can’t afford to start an emergency fund is the main reason why you aren’t starting one.

The second reason is perhaps you don’t know how to build an emergency fund that will suit your personal needs.

Get yourself a piece of paper and a pencil and as you read this I want you to make notes that you can refer back to.

All you need to do is answer a few simple questions before setting the platform to build your emergency fund.

After that seeing growth in your emergency fund takes time and effort on your part.

  1. Open a savings account with your bank or a completely different bank that is out of the way so you’re not tempted to use the money.
  2. Write down goals and what emergencies might your account be used for.
  3. Create an Emergency Savings Fund Plan And Build it into your budget (like we have) ex: Pay all your bills and investments and whatever is left over goes into emergency savings. This is a zero-based budget approach.
  4. Start By Saving What You Can Afford Even if it’s only $1, $2, $5 based on your goals. When your income improves work on trying to save even more.
  5. Be Consistent With Your Emergency Fund Savings (Pick a date you move money to your Emergency Fund Savings Account)
  6.  Have patience and don’t focus on the number just continue to save.

Emergency Fund Tips

Stop Complaining About Your Money Situation

Have you ever been told to stop complaining and do something about it?

Yes, that’s what I mean.

The worst and I mean, THE WORST part of finance is listening to people whine about why they are broke.

That might sound harsh but 99% of the time you never hear of positive ways of achieving goals and changing the situation.

In some cases, I feel people are hoping for a miracle or for someone to feel sorry for them.

Sadly, no one really cares how broke you are.

That’s the plain truth.

Your friends might sympathize with you and help you when needed but they can’t fix your problem.

Stop telling yourself you can’t, when you can and end the constant negativity unless you want to sit in a dark pit forever.

Emergency Fund Examples

The best example I can give you is our personal example of an emergency fund.

In the beginning, as we were paying down debt and our mortgage it was always 6 months to a year saved in an emergency fund.

It took time to build our emergency fund as we would stash money any chance we could.

Frugal living really helped speed up the process of saving money especially using coupons and cashback opportunities.

I even worked over-time where I could to increase our savings power.

Every little bit of extra money went to paying down debt, retirement, and the rest was put into our savings account.

Today we are mortgage free and debt-free along with a 2017 truck that was paid in cash $46,000.

That doesn’t mean that we don’t need an emergency fund, because we do.

Anything could happen and given the current situation where Canadians are laid-off or facing potential job loss is a prime example.

Always Keep An Emergency Savings Fund

Just because you have no debt doesn’t mean that you are financially safe as there are still bills to pay.

Although we are debt-free our emergency fund is still operable however we keep far more in it than needed.

The reason for that is we are in the middle of renovations and the money is accounted for.

Aside from home renovations, we’d keep a minimum of $5000 to a maximum of $10,000 in our savings account as an emergency fund.

Again, the number you save has to be based on your personal situation.

  • Are you debt-free?
  • How much is your rent or mortgage?
  • What other bills do you pay for throughout the year?
  • Are you saving for retirement?

This is where a budget comes in handy so you know your numbers and can plan your emergency fund accordingly.

Best Places To Keep Your Emergency Fund

Where should I put my emergency fund?

Since we both like our emergency fund to be accessible at any time we keep it in a high-interest (joke) savings fund.

We’ve already maxed out our tax-free savings account which is our second place to stash our emergency fund.

It really depends on how fast you or your advisor can access the money to get it into your bank account.

Every emergency situation will be different and for that reason, we keep ours in the bank.

If you have a fireproof safe at home and would rather keep the cash on hand, put it in your safe.

I’m not an advocate of using retirement savings as an emergency fund as the costs involved are far too high.

Using Your Emergency Fund

When should I be using my emergency fund?

Emergency expenses should be straightforward whereas you only use the money for emergencies.

There’s no compromise here especially when you knowingly spend money that you can’t afford to spend.

This is what gets me going with some people who just don’t get it.

Emergency means you have no other options and money that is needed on the spot.

You need to understand how much you need to save and when the appropriate time is to use your emergency fund money.

Too often I see people tap into their emergency fund for situations that could have been avoided by using a budget.

Tapping into your emergency fund for reasons not related to an emergency defeats the purpose of saving.

I think anyone who defends that becomes the person who ends up wiping out their bank account with excuses.

There are no excuses when it comes to balancing your financial needs and wants especially if you’re creating debt.

  1. Your Car broke down and the expense to repair it is large
  2. You’ve lost your income sources
  3. Emergency home repairs not planned for (always plan for the worst and save using projected expenses)
  4. Death in the family and you need to book a flight, transportation, and accommodations for the funeral
  5. Calling your employer due to emergencies beyond your control causing income loss
  6. Emergency situations such as the current 2020 Covid-19 pandemic

Student Emergency Fund

Should a student keep an emergency fund?

Absolutely students should have an emergency fund when they are in college or university.

Life is no different especially if you are funding your education without the assistance of student loans or parents’ help.

When I was in University I always kept an emergency fund of $500-$1000 in British pounds in my savings account.

The amount at the time would cover my rent, groceries, and other personal needs for a few months.

I didn’t have parents to fall back on for emergencies as they were invested in real estate and the family business.

The last thing I wanted was to rely on my parents for money when I was capable of working part-time while I was in school.

That’s exactly what I did and during the summer months as a student.

I worked full-time plus hours to save as much money as I could which eventually helped me buy my first house.

Not only did I pay for my education I was always careful to have an emergency fund topped up at all times.

It’s never something I will look back on and regret nor occasionally missing out on summer fun with friends.

There’s got to be a happy balance especially if you want that financial kick-start in life.

Working and saving money in your 20’s is not something you should contemplate, just do it.

Seniors Emergency Fund

Should seniors keep an emergency fund and why?

This can get tricky but if you’re a senior whose only source of income is from the government I’d say yes.

If you have multiple streams of retirement income and are comfortable financially just make sure you have access to cash.

It’s easy to have numbers on paper but if it takes time to get the money released that’s not great in an emergency situation.

The other option is to have a credit card and pay it in full as soon as you release funds for an emergency.

If you are the power of attorney for a senior who is unable to take care of their finances you should also consider an emergency fund and budget.

There are expenses that aren’t covered for seniors especially if they fall ill or end up in long-term care or retirement home.

Not only is budgeting a great idea when you are senior so is stashing some cash for emergencies.

Obviously you won’t need as much if your home is mortgage-free and your vehicle is paid in full.

The idea for seniors is to hold back some money in a savings account just in case something were to go wrong.

A few examples where you may use your emergency fund as a senior:

  • The furnace or other large appliances may need replacing
  • Home maintenance emergencies
  • Unexpected vehicle repairs
  • Healthcare that is not government funded

There’s nothing wrong with keeping back 3-6 months of emergency fund savings as a retired senior.

Peace of mind goes a long way.

Emergency Savings Summary

Financial interest Quote

Just do it.

Interest Your Pay Is A Penalty Where Interest You Earn Is A Reward – Chris Hogan

Discussion: What other tips would you add for someone starting an emergency fund?

Leave me your comments below as I’d love to hear about your personal experiences.


Home Budget Income Report April 2020

Budget Example

Where did the money go?

Hi CBB readers,

Thanks for stopping by to read our budget update for April 2020.

There wasn’t too much action going on with our budget in April apart from spending more in the grocery category.

The reason for this is that we did a Costco run and decided to double-up on products that we normally buy.

Right now the wait time to get into Costco can be long so the fewer times we need to go in, the better.

We will work on balancing our grocery budget for the remainder of 2020 to make sure we don’t overspend our yearly budget totals.

Other than that I’ve been buying bits and pieces for renovations.

You’ll notice we saved tremendously on petrol for my truck which I’m sure many of you are noticing with your own.

These types of savings can be used for paying off debt or put into your emergency fund if available to do so.

Take Care,


Home Budget Percentages

Budget Percentages

Our savings of 55.18% include investments as well as any savings for this month based on the net income of $9315.07.

We save up money in our projected expenses for things that need to be paid for in the coming months.

All of the categories took 100% of our income which shows that we accounted for all of the income in April 2020.

This type of budget is a zero-based budget where all of the money has a home.

Monthly Home Budget Expenses

Budget Example

Below is a breakdown of our expenses which helps us to understand where all of our money goes.

  1. Chequing– This is the bank account where all of our debt gets paid from. We use Simplii Financial.
  2. Emergency Savings Account– This is a high-interest savings account.
  3. Regular Savings Account– This is a savings account that holds our projected expenses.
  4. Monthly Budgeted Total: $6,392.68
  5. Monthly Net Income Total: $9315.07
  6. (Check out our Ultimate Grocery Guide to see where our grocery money goes)
  7. Projected Expenses: These are expenses we know we will pay for throughout the year = $852.91
  8. Total Expenses Paid Out: $6104.12
  9. Total Expenses Actually Paid Out: Calculated is $9315.07 (total net monthly income) – $852.91 (projected expenses) –$ 2358.04(savings to emergency fund) = $6104.12
  10. Actual Cash Savings going into Emergency Savings: Calculated is $9315.07 (total monthly net income) – $6104.12 (actual expenses paid out for the month) – $852.91 (projected expenses) = $2358.04

Monthly Budget and Actual Budget

Below you will see two tables, one is our monthly budget and the other is our actual budget.

This budget represents 2 adults and a pre-schooler, plus retirement investments.

Budget colour chart: If highlighted in blue that means it is a projected expense.   

Since May 2014 we’ve been mortgage-free so much of our money will be directed at savings, investments, and renovations.

I appreciate that you enjoy this budget update each month but I do hope you view this as an educational tool rather than comparing your financial numbers as our situations are all unique.

Spending less than we earn and budgeting has been the easiest way for us to pay down debt and save money.

Budget Categories

Monthly Home Budget Actual Expenses

Budget expenses

CBB Home Budget Updates Month By Month

Just in case you missed our budget updates from 2012- present I’ve compiled them all on one handy page: monthly budgets.

2020 Home Budget Challenge

2020 Budget Challenge

Congratulations to the wonderful people below for taking on the 2020 CBB Budget Challenge.

It’s not easy to commit to something like this and as I learned last year many people initially want to join in December but drop out quickly.

April Update: We still have two budget challengers reporting their budget in April.

Let’s see how long they can hold on and if they will make it to December.

Budget Challenger #1

April and June are annually the months that I whisk away the balances of our various savings accounts into better “terms” than a high-interest savings account can offer.

It’s not hard to beat a savings account at this point! 

But, I FEEL so broke when I have only cents left in our accounts and it’s time to rebuild. 

In April I whisked away these savings:

  1. Vacation funds
  2. RRSP-Accounting-TFSA Fees
  3. GST & Income Tax Payments
  4. New Purchases – both personal and home-related
  5. Emergency funds.

In June I’ll tackle the savings accounts for:

  1. Car Replacement
  2. Reno-Repair-Replace slush fund
  3. Entertainment & Gifts reserve
  4. Car Servicing and Repairs
  5. Appliance Replacement savings.

By the time I am done in June, everything will be invested and all I will have left in our bank accounts will be just enough to cover the July bills and a few cents in each of the savings accounts.

Let’s not picture megabucks $$$’s or anything though with this sweeping of mine. Our bank has a $500 minimum GIC!

However, $500 earning 2.35% is better than $500 earning only half of one percent sitting in a high-interest savings account.

It creates a heck of a lot of accounting for me but I try to earn whatever interest I can even if it’s taxed at 50%.

I figure half of a little bit of interest is better than half of nothing.

I mailed our 2020 RRSP contributions to the stockbroker on the 24th but with very few people physically in the back office at this point, it could quite sometime before I see the funds appear in our accounts and I am able to get them invested.

The next item on our list of 2020 financial goals is to save up for our non-registered brokerage account “top-ups” in August and November.  

We aren’t talking big top-ups either just whatever little bits we can manage to scrape together.  

My dream goal would be to increase the maturities to the next highest thousand so I can re-invest the maturing principal + interest earned on it + the new funds for a slightly larger investment.

But, the next highest hundred works too and unfortunately tends to the best we can manage.

Our Future Payments account is also screaming that it needs another $500-$1,000 added to it in order to cover the property taxes that are coming up at the end of June.


Ever feel like there’s no shortage of bills to pay?

Even after taking off the homeowner’s grant, it’s still almost $5,000 every year for our property taxes.

It’s no wonder we haven’t bought anything new for either ourselves or for the house in the last 30 years!

I’m trying to keep a real lid on any money that we spend these days and have limited our budget to just a wee bit of food and our prescription medications.  

I did have to cough up a $1,000 deposit towards our landscaping, staining and outdoor maintenance fees that are coming in May.  Owning & maintaining a home is certainly not cheap!

Easter was inexpensive at our house this year! First off, the Easter Bunny skipped us no jelly beans, jujubes or chocolate for us.

We still have leftover goodies from Halloween, Christmas, and Valentine’s Day so the last thing we needed was more candy.

I decided to show solidarity with the Easter Bunny and skipped making a massive holiday meal and doing any baking.

Dinner at our house was simply a can of soup and I managed to turn my bowl became 2 meals for myself.  

Hubby gets a 4-day Easter weekend every year and we love just having the time together.

We were grateful to my youngest sister for setting up a Zoom conference call with my entire family on Easter Sunday.

It was great to see everyone! Dad and his wife don’t have a device with a camera but we could at least hear them and they could see all of us by routing the call through their Apple tv.

We are spread out over BC and Alberta so it was a real treat to have that call and best of all, it was free!

My SCOTIABANK VISA was the only credit card that we used this month for our one and only click & collect grocery purchase.

With income streams so uncertain these days, I am enamored of a card that offers us some cash back instead of points.

Points are lovely but this year we aren’t spending any points so I’ve shifted gears to go for the green.

Our balance is very slowly creeping up and currently sits at $60.21 which we’ll receive in November.

Hopefully, by that time, the balance will be enough to cover a month’s worth of groceries and we can eat for free that month!

Travel and in-person family gatherings may be on hold but we are still saving up for the day when it is safe to consider them again.

In the interim, we can have a bbq in our own back yard with a lovely virgin cocktail to celebrate simply being alive and in good health on a warm and beautiful day.

Since I didn’t expect to need our vacation funds for quite some time I invested them in a 15-month GIC @ 2.35%.

I might as well make some money as it was just sitting there collecting dust.  

In May, we’ll start the vacation saving process again.

What I Learned This Month

Nothing in life is guaranteed. For that matter, life itself isn’t guaranteed so I plan to enjoy every single day to the max.

Despite seeing my Mom pass away at age 59 and very nearly dying myself at age 59 I had lost sight of truly celebrating each day as the gift it is.

Funny how it’s so easy to get caught up with day-to-day living that I forget to appreciate simply being alive.

It’s also a reminder to me to ensure hubby knows how very much he is loved and appreciated.

I plan to make that my absolute top priority going forward!

Unfortunately, I lost focus on this one too.

Obviously my attitudes need a major re-set!

It may sound pessimistic but if I plan for the absolute worst-case scenario, 99.99% of the time our actual life will seem like gravy by comparison to my doom & gloom imaginary prediction.

The other 0.01% of the time, well at least we will be prepared.

 So priority #3 for me going forward is that we are saving like it’s the very last money that we will ever receive just in case it is!

Well, that’s April in the rearview now.

See you next month!

Budget Challenger #2

Hey Mr. CBB, here is my April Budget Challenge report.

My spreadsheet isn’t adding things up for me, there must be a mistake in the formulas somewhere. 

I’m feeling a bit lazy so I’m going to eyeball this instead of fixing the formulas right now:

  • Transportation approx 10% of this months pay
  • Life: 25% of this months pay
  • Short term savings: 5% of this months pay
  • Household: 5% of this month’s pay

Once I shuffle my money around a bit I’ll be able to put 55% of my income in long term savings for this month.

Not having a mortgage payment is amazing for savings, but not being able to travel, and not needing to travel for work is really helping my bank account.

I’ve been trying to focus on the next 2 years, what am I looking at for costs.

Putting aside money for this helps me feel calmer about things.

However, I’m not happy I have investments and would rather have the money under my mattress right now.

I haven’t looked to see how bad they’re doing, I’m still young enough that they have time to turn around before I retire but it’s making me sick.

Automatically I invest money each month and I need to talk to my bank to see if I should stop this for now or not.

They probably won’t give me a good answer, just the one that makes them money.

I hate being cynical but its probably true. I find investing and money matters so complicated, I wish it was easier/

Planning: car – issues with the car that need to be fixed unknown amount but probably $750-1000 going to have to happen in the next 2 months.

Also, I have inspection this year, and undercoating.

The car gets paid off this year.

I’d like to see myself get another 2 years out of it before I have to get a new one. house – need to paint deck to extend life a bit more but probably will need to replace in the next 2 years.

Also, have a lovely wasp problem so looking at exterminators I guess.

Wood – need to order cords of wood for this year and next (we try to get enough for the following winter in case there is a shortage – we ran out of money in 2019 with all the car issues so we didn’t get to stockpile like we normally do).

Chimney – chimney needs cleaning probably in August I’ll try to get that done.

That’s about $130.

Oh, and I forgot the roof.

We want to get a metal roof in the next 2 years so saving for that as well.

That’s it for me for now.

I hope everyone is doing okay with their social isolation, and for those impacted by the mass shooting.

We’re having a rough go, and I hope everyone is taking care of themselves.

Share to...

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.