Emergency Fund
Savings set aside for unexpected expenses — car repairs, medical bills, job loss. Most experts recommend 3-6 months of living expenses. Keep it in an on-call savings account for instant access.
An emergency fund is money set aside specifically for unexpected expenses or income loss. It's not for holidays, Christmas shopping, or that new phone — it's for genuine emergencies like car breakdowns, unexpected medical bills, urgent home repairs, or covering expenses if you lose your job.
Most financial experts recommend saving 3-6 months of essential living expenses. In NZ, that typically means $6,000-$15,000 depending on your situation.
Keep your emergency fund in an on-call savings account — not a term deposit — so you can access it instantly when you need it. The slightly lower interest rate is worth the peace of mind.
Why this matters
Having an emergency fund is the foundation of financial stability. Without one, a single unexpected expense can push you into debt, create stress, and derail your financial goals. Start small — even $1,000 provides a meaningful buffer. Set up an automatic payment from your cheque account to a separate savings account on payday, and build from there.
Learn more
Read our guideRelated Budgeting terms
Safe to Spend
Your available balance minus upcoming bills and savings commitments. It's the amount you can actually spend without going into the red. Steady shows this number on your dashboard.
50/30/20 Rule
A budgeting guideline: 50% of income on needs (rent, food, bills), 30% on wants (dining out, entertainment), 20% on savings and debt repayment.
Zero-Based Budget
A budgeting method where every dollar of income is assigned a job (expenses, savings, or debt). At the end of the month, income minus allocated amounts = zero. YNAB uses this method.
Sinking Fund
Money set aside for a planned future expense — holiday, Christmas gifts, car registration. Unlike an emergency fund (for surprises), a sinking fund is for things you know are coming.
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