10 of the Most Common Emergencies You Should Save For

Life has a way of throwing unexpected challenges our way, particularly when it comes to finances. Understanding the most common financial emergencies can help you better prepare and build an appropriate emergency fund. Here are some of the most common emergencies you should be saving for, as well as my tips for how to build those savings in the first place.

Why you need an emergency fund

An emergency fund is your financial safety net-it's not a question of if you'll need it, but when. As opposed to other savings vehicles, your emergency fund is the cash reserve set aside for unplanned expenses or financial hardship, like job loss, medical emergencies, or unexpected but urgent car or house repairs.

Aside from the upfront costs of specific emergencies, having dedicated savings for unexpected expenses helps you:

• Prevent high-interest debt accumulation

• Reduce financial stress and anxiety

• Maintain your standard of living during difficult times

• Provide time to make thoughtful decisions rather than rushed ones

• Keep small emergencies from becoming major financial crises

The most common financial emergencies

Digital personal finance company Achieve asked consumers about their various financial issues in the past year. According to their survey results, here are the ten most common financial hardships, and what those emergencies looked like financially.

Medical Issues

What to expect: Even with insurance, medical emergencies can cost thousands of dollars in deductibles, co-pays, and out-of-pocket expenses. Chronic conditions may require ongoing care and medication.

Typical costs: $1,000-$5,000+ for emergency room visits; $2,000-$10,000+ for surgical procedures

Job loss or reduced income

What to expect: Beyond immediate loss of income, job transitions often involve gaps in health insurance coverage and additional expenses like COBRA payments or job-search costs.

Typical costs: Three to six months of living expenses; potentially more in specialized fields or during economic downturns

Vehicle problems

What to expect: Cars can require unexpected repairs or replacement, affecting your ability to work and manage daily responsibilities.

Typical costs: $500-$2,000 for major repairs; $5,000+ for replacement

Banking fees and penalties

What to expect: Overdraft fees and late payment penalties can quickly cascade into significant expenses.

Typical costs: $30-$100 per incident; can multiply if multiple bills are affected

Home repairs and appliance replacement

What to expect: Essential systems like HVAC, plumbing, or major appliances can fail without warning.

Typical costs: $250-$1,000 for appliances; $1,000-$10,000+ for major home repairs

Death of a family member

What to expect: Beyond emotional trauma, deaths can bring unexpected funeral costs and potential loss of household income.

Typical costs: $7,000-$12,000 for funeral expenses

Becoming a caretaker

What to expect: Taking care of an adult family member can involve reduced work hours, medical equipment, and home modifications.

Typical costs: Varies widely; often includes both direct costs and lost income

Legal issues

What to expect: Legal representation, court fees, and potential settlements can create sudden financial burden.

Typical costs: $2,000-$10,000+ depending on complexity

Victim of a crime

What to expect: Property damage, theft, or fraud can result in immediate expenses and long-term recovery costs.

Typical costs: Varies widely; may include insurance deductibles and security upgrades

Divorce or separation

What to expect: Legal fees, separate housing costs, and division of assets can strain finances.

Typical costs: $15,000+ for contested divorces; additional costs for separate households

How to build your emergency fund

The typical rule of thumb is to aim for six months' worth of living expenses in your emergency fund. If that sounds too unrealistic a goal for your current financial situation, another guideline for what counts as a starter" emergency fund is around one month of rent plus your insurance deductible. When you're figuring out that number, factor in expenses like housing, food, utilities, insurance, transportation, and debt payments. Non-essential expenses like vacations, entertainment, or dining out don't belong in your emergency" calculations.

My number one tip for building your emergency fund is automating your contributions. Use a high-yield savings account separate from regular checking-this is the best mix of building interest without sacrificing access to your funds. Here's our guide to choosing a high-yield savings account.

Try to make saving a priority by treating those automated contributions as a fixed expense. Protect your funds by defining what constitutes a true emergency. This is money you've set aside in case the unthinkable happens, not because you need a vacation (no matter how sympathetic I am to that cause).

Remember, building an emergency fund is a journey, not a sprint. Even small regular contributions add up over time. The peace of mind that comes with having a financial buffer is worth the effort of building and maintaining your emergency fund. Start small, but start now.