Saving money can be difficult, even when life is calm. When you’re living paycheck to paycheck, it can seem like it’s virtually impossible to put money back for an emergency. A car repair, medical bill, broken appliance, or sudden job loss can quickly derail your finances if you have nothing set aside. That’s why an emergency fund is one of the most important financial tools you can build, even on a limited income.

Contrary to what you may have believed, you don’t need thousands of dollars on hand to start your emergency fund. The real power lies in consistently putting money into an account that you’re only going to use in an emergency.

More than 50% of Americans acknowledge that they have no financial safety net in place, and are only one financial emergency away from bankruptcy. It’s certainly no coincidence that more than 50% of Americans say that they’re living paycheck to paycheck. If you’ve been wondering how to save money on a tight budget, we’ve put together a list of tips from financial experts to put you on the right track.

Set Your First Milestone

Most financial experts agree that your emergency fund should have somewhere between three and six months of expenses. To the ordinary person, especially to the person living paycheck to paycheck, that can sound incredibly daunting. In fact, it can sound impossible. Instead of focusing on the final goal, set up milestones for yourself that you can celebrate along the way. Financial advisors call these micro-goals, and say that you should set them at $100, $250, $500, and $1,000.

Even having access to $500 in an emergency can be the difference between paying cash for an unexpected auto repair and having to put it on a credit card. If you have to use a credit card, that $500 can quickly turn into thousands of dollars when interest rates kick in.

Breaking it down makes saving psychological instead of stressful. Saving $10–$20 at a time doesn’t feel dramatic, but over months, those amounts quietly snowball into security. Take the time to celebrate these milestones when you reach them. That doesn’t mean that you spend a large sum of money celebrating. However, it does mean that you take the time to recognize that you’re making sound financial decisions.

Track Your Spending

Most budgets don’t fail because of a single big expenditure. Instead, budgets fail because of poor money habits that chip away at your money. Streaming subscriptions, app upgrades, unused memberships, delivery fees, and convenience purchases slowly drain cash that could instead support your emergency savings.

This doesn’t mean that you cut off all forms of entertainment from your budget. However, it does mean that you conduct a simple review of bank and card statements. These personal audits often reveal regular expenses that no longer align with your priorities. Asking yourself whether you would sign up for each expense again today is an excellent way to identify what can go and what needs to stay.

Even modest changes make a difference. Redirecting twenty or thirty dollars per month toward savings may not seem dramatic, but over a year, it forms the foundation of a reliable financial cushion.

Pay Yourself First Instead of Last

Many people make their emergency fund the last thing that they address, putting whatever money is left in it at the end of each month into it. Unfortunately, real life rarely leaves money at the end of each month. A more effective approach is to treat your emergency fund like a required bill. While you may not be able to put the same amount in it each month, the goal is consistency, not perfection. Transferring money into your emergency fund as soon as you are paid ensures that saving happens before spending decisions erode your intentions.

If you can afford to put the same amount in your emergency fund each month, consider automating that deposit. Remember, something as seemingly small as $20 at a time can add up, giving you access to hundreds of dollars in the event of an emergency. This approach reframes saving as a priority rather than an afterthought, which is the mindset shift needed for long-term success.

Keep Your Emergency Fund Separate From Everyday Spending

Mixing your emergency fund with your regular checking account makes it virtually impossible to track progress or build momentum. It also makes it incredibly easy to accidentally dip into your emergency reserve. A separate savings account creates a psychological barrier and helps prevent impulse withdrawals. It’s also worth noting that many people choose a high-yield savings account (HSA) for their emergency funds, as those accounts earn interest at a higher rate. Having your emergency fund in one of these accounts also makes it harder to access the funds, since you can’t just swipe your debit card.

The separation also reinforces the purpose of the money. When you can see your emergency fund balance growing independently, it becomes easier to protect it and harder to dip into it for nonessential purchases. Over time, that separate account becomes a symbol of security and independence, which itself is motivating.

Define the Word “Emergency”

An emergency fund only works when it’s used correctly. While your definition of a financial emergency may not be the same as everyone else’s, it’s important to clearly define what a financial emergency means to you. Generally speaking, a financial emergency is an unexpected, unavoidable financial event involving your health, safety, or income. Less important things, like vacations or fancy dinners, simply don’t constitute an emergency.

A useful guideline is that if something can be anticipated, budgeted, or postponed without serious harm, it is not an emergency. Having this rule in mind before a situation arises prevents emotional decision-making and protects the fund from slowly disappearing.

Temporarily Supplement Your Income

If you’re living paycheck to paycheck, it may be possible to supplement your income, which helps with your emergency fund while also giving you some extra breathing room with your monthly bills.

Fortunately, the gig economy has never been more prevalent than it is today. Earning some extra income can be as simple as delivering a couple of grocery orders on your way home from work each day. While these side gigs may not be enough to fund your emergency account on their own, they can free up the additional income that you need to build a financial safety net for yourself.

Start Small, But Start Today

Now is the right time to start building your emergency fund. The average American is one missed paycheck away from not being able to afford their monthly rent. If that applies to you, it’s time to start making some changes. Having access to money, even if it’s only a few hundred dollars, when faced with a financial emergency, is empowering and stress-reducing. Start saving today.