What is emergency savings?

Emergency savings, also called a rainy day fund, is a cash reserve that’s specifically set aside for unplanned expenses or financial emergencies.

Why do I need it?

Without savings, a financial shock—even minor—could set you back, and if it turns into debt, it can potentially have a devastating impact.

Federal Reserve data shows that 37% of Americans would struggle to cover a sudden $400 emergency without borrowing money. Common financial shocks include car repairs, medical bills, loss of income, or even a simple speeding ticket.

How much do I need in it?

Experts recommend saving at least 1 month of essential living expenses (3 to 6 months even better). The exact amount depends on your situation. Think about the most common kind of unexpected expenses you’ve had in the past and how much they cost. This may help you set a goal for how much you want to have set aside.

If you’re living paycheck to paycheck or don’t get paid the same amount each week or month, putting any money aside can feel difficult. But, even a small amount can provide some financial security. Having savings turns a crisis into an inconvenience.

How does Sunday help with emergency savings?

Sunday helps low-income workers build emergency savings quickly by matching their monthly savings. Our match not only accelerates savings, but motivates people to save by making it easier to save. We also give foundational financial and investment skills.