Is Your Emergency Fund Big Enough?

While you can't predict what will go wrong, you can ride out the proverbial storm much easier with a little preparation. These steps can help.

Is it called a rainy day fund because of all the unexpected repairs that are required on roofs and gutter systems after a surprise storm? 

Whether the emergency you're confronted with is weather-related or not, having the cash on hand to deal with it can help reduce the financial stress of any crisis. Despite our best intentions and maintenance regimes, water heaters and other appliances break, pets become ill, pipes get old, companies lay off employees and record-breaking weather events cause property damage. While you can't predict what will go wrong, you can ride out the proverbial storm much easier with a little preparation. 

How big should your emergency fund be?

For years, the rule of thumb was to set aside the amount equal to six months of living expenses. More recently, some experts have advised saving even more — enough to cover you for up to a year.1

Think about how much you would need on hand if you or your spouse lost a job, and then start making a plan to stash a little away every month until you reach that goal. (Even managing to save a few thousand dollars can help cover the plumber's invoice without taking on debt.) 

What's a good saving strategy?

Tracking your spending and creating a monthly budget is the first step to assessing your expenses and freeing up extra cash every month. Use that money to pay off any high-interest debt first, and then start building your emergency stash. Sometimes the easiest way to save is to set up an automatic savings transfer, so you can put some money aside before you have a chance to spend it. 

Where should you stash it?

It's about balancing interest with accessibility. Since emergencies often require immediate cash flow, consider storing your emergency stash where you can quickly get to it. As you begin building your funds, a basic savings account <> can be a good option, offering interest that will help grow your funds and low minimum balance requirements to make it easy to get started. 

Once your fund grows past $2,500, consider moving it into an account with greater potential interest earnings, such as a Money Market Account, which also offers the ability to write checks. 

Both types of account offer convenient ways to access your cash fast, including ATMs, teller withdrawals and transfers to your Rabobank checking account through Personal Online Banking. 

Add It Up

When it comes to building your rainy day fund, you don’t have to start big. Just set your goal and start. Remember, every little bit you save now will add up to less stress later — and much more peace of mind. 

Customer Benefit: Fast Account Opening 
As a Rabobank customer, you have a fast track to opening new accounts online. Just click your choice below to get started now: 
• Personal Savings
• Personal Money Market

As your savings grow, we also offer Personal Investment Savings accounts (minimum opening balance $10,000) and Personal Investment Money Market accounts (minimum opening balance $25,000) that offer a higher rate of interest.


  1. “Do you have emergency savings?” MSN Money, June 25, 2012,, accessed June 12, 2013

The information contained in this article is intended for general educational purposes only and is not to be construed as legal, tax, or financial advice. Please consult with your own legal, tax or financial advisor for guidance with your own particular circumstances.