Life is often filled with surprises; some more pleasant than others. When it comes to unforeseen events like job loss, illness or major home repairs or renovations, it’s important to be financially prepared. Many experts suggest that having an emergency fund to cover at least three to six months of total living expenses can help us get through difficult times, if they arise. Having access to a ready reserve of cash with an emergency fund will contribute to your peace of mind and prevent you from having to take on additional debt.

Quick Stats

$4,084 - Average amount Canadians intend to spend in the next month1


  • Non-discretionary costs such as mortgage payments, rent, hydro, etc.
  • Discretionary costs such as entertainment, subscriptions, memberships, etc. 

50% of Canadians cannot manage a surprise expense of over $1,0002

Let’s look at three steps to start your emergency fund. 

Step 1: Determine how much you can save

Start off by calculating your total monthly income and then deduct all non-discretionary expenses, including items like rent or mortgage, utilities, transportation costs, groceries, childcare, etc. If funds are remaining after you’ve accounted for all your non-discretionary expenses, determine how much you can direct to an emergency fund each month, and to other discretionary costs (like entertainment, travel, etc.). Don’t forget to use unexpected windfalls, like tax refunds or bonuses, to help speed up the funding process.

Contribute whatever you can to your fund – even starting with $25 a month will add up over time. Try the Scotiabank Money Finder Calculator. It will help you determine if you have money available to put towards your emergency fund, and other financial goals, by comparing your income to your expenses.

Step 2: Open an account

Building an emergency fund is typically considered a short-term financial goal requiring less than three years to achieve and, as such, a savings account is typically recommended. A savings account is a great option to park and grow your money while you work towards your goal. Most important, a savings account allows you quick access to your money should you need it.

There are a variety of savings accounts you can use. The one that's right for you will depend on your specific needs, time horizon and savings goals. Speak with your Scotiabank advisor to determine which savings account best meets your needs.

What is a high-interest savings account?

A high-interest savings account (HISA) is just what it sounds like. HISAs usually earn more than a typical savings account, helping you increase your savings over time. How much interest you earn depends on the financial institution, but typically, the higher your balance or the longer you keep your money in the account, the more interest you can earn.

Scotiabank offers several HISAs , including the MomentumPLUS  Savings Account , which allows you to save for multiple goals conveniently in one account by providing  a choice of multiple Premium Periods3 at any one time (90 days, 180 days, 270 days, or 360 days) – the longer the Premium Period (or time your money remains in the account), the higher your interest rate4. In addition, there are no monthly account fees or minimum balance required.

Step 3: Schedule Pre-Authorized Contributions

Pre-Authorized Contributions (PACs) are a convenient and flexible way to schedule automatic deposits to your emergency fund. You choose the amount you want to contribute and how often – for example, weekly, biweekly or monthly. And you can adjust the amount and frequency at any point in time.

If money is tight for automatic deposits, try diverting whatever you can to your emergency fund, and then increasing the amount when you can. The key is to get started.

To see how quickly your savings can grow, visit and try out our interactive PAC video.

Why is a savings account a good choice for an emergency fund?

Liquidity:  A savings account allows you immediate access to your money should you need it.

Automatic contributions: You can set up Pre-Authorized Contributions and add to your emergency fund on a regular basis and watch your money grow faster.

Safety: Putting your money in an insured savings account is much safer than keeping it in a cookie jar or under your mattress

Interest: When you put your money in a savings account you earn interest. The interest rate you earn can vary based on where you save your money, how much you save, and how long you save.

Reduce temptation: Putting your money into a savings account can help reduce the temptation to spend.

Ready to get your finances on track for your future? Come in and speak to a Scotia advisor today