How to Build the Perfect 'What If?' Fund

Whether it’s an impromptu trip to the emergency room or an unanticipated repair bill, life’s little surprises can really do a number on your finances. However, with a well-built “what if?” fund, you should be able to take unexpected expenses in stride without disrupting your financial well-being. So, without further ado, here are some tips on how you can build it.

1. Set Your Savings Goal

Unlike retirement or other major savings goals, your “what if?” fund probably won’t take you years and years to complete. While there isn’t really a rule of thumb on what your “what if?” fund’s cap should be, a good way to gauge how much you should save is to take a look back on your expenses from the prior year. Seeing what unforeseen costs you had to deal with in the past, should give you a decent idea for how much you may want to have on hand at any given time.

2. Make Some Room in Your Budget

Once you have an idea of how much you’ll need to save, you may find yourself in need of extra cash to put towards it. If money’s tight, you may want to consider cutting back on some of your wants (a.k.a., your unnecessary or “fun” expenses) for a few months so you can funnel that income towards your “what if?” fund. If that doesn’t seem to be a viable option, you may want to look into picking up a side hustle to help you give your cash flow a boost.

3. Contribute Consistently

The key to reaching any savings goal is consistency. If you find yourself constantly forgetting to put money towards your savings goals, you may want to consider setting up an automatic transfer with your bank or credit union. This is a super easy way to ensure that you’re helping that “what if?” fund grow every month.

It’s also important to be mindful of how much you’re contributing each and every month. If you find that you keep having to cut back on your savings to make up for other expenses, you may need to go back to square one and revaluate your budget. Enthusiasm towards reaching your savings goal is certainly a good thing, but you shouldn’t let other portions of your budget suffer.

4. Replenish When Necessary

Once you feel you’ve constructed your ideal “what if?” fund, you’ll be able to reallocate those monthly contributions to other parts of your budget. However, if you find that your fund is starting to run low after covering some unexpected expenses, you’ll need to be prepared to start contributing towards it once again. While it is possible to be faced with an expense that would drain your fund completely, you’ll want to try and do everything in your power to keep your fund from evaporating.

Of course, your financial stability doesn’t stop and start with a well-built “what if?” fund. Contributing towards greater savings goals (such as retirement ), effectively managing your debt and credit cards, and understanding your credit score all contribute to maintaining financial wellness. Tracking your credit annually by getting your free credit report also is helpful. (You can also view your two free credit scores each month on

While it might seem like a lot, having a firm grasp on these topics should instill you with confidence and minimize the chances that you’ll fall into hardship.

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Leslie Tayne, Esq., is a consumer and business debt-related attorney and advisor. She founded Tayne Law Group, P.C., concentrating solely in debt resolution and alternatives to filing bankruptcy for consumers, small business owners and professionals. In addition, Tayne Law regularly consults and advises on debt management related issues. Her book, Life & Debt, shows how learning to embrace your debt can help you not only like it, but love it. More by Leslie Tayne