“Covid really drove home the importance of having an emergency fund,” says Diana Linn, a wealth advisor in Newton, Mass. But the rest of setting up an emergency fund, from estimating your needs to opening an account, is relatively simple. Chen recommends multiple emergency funds, with different time frames and purposes: a short-term fund for any last-minute necessary purchase like a new car battery that you’d otherwise charge on a credit card; a midterm fund for repairs, like a new water heater; and a long-term emergency fund for when you lose your job. Decide how to reach your savings targetThe surest way to build up an emergency fund is to regularly put aside a portion of your earnings into an emergency savings account, preferably as an automatic debit from a checking account. Decide where to keep your emergency fundThere are several savings vehicles you can use for your emergency fund, both online and otherwise.

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