Is Your Emergency Fund Running Low? Here's How to Bulk It Back Up

If you're struggling financially right now, you're not the only one. Here's how you can identify financial issues, implement a budget and prioritize rebuilding your emergency fund to achieve lasting financial stability.

By Bruce Maginn, Principal

published 5 January 2026

in Features

A woman looks sad that she's holding her piggy bank upside down and nothing's coming out.

Coming off the longest government shutdown in history, tens of thousands of layoffs and continuing inflation, many Americans have run their emergency funds dangerously low.

Unfortunately, others may have never had an emergency savings fund to begin with.

According to a recent report from Empower, 42% of Americans say their current savings wouldn't help if they suddenly lost their job. Meanwhile, 1 in 3 say they have no emergency savings fund at all.

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So, if you're in this position, you're not alone. The good news is there are steps you can take to build an emergency fund that will last.

Before you can fix the problem, you need to identify it first. If your emergency funds are dwindling, was it due to a true emergency, like the sudden loss of income or an unexpected medical expense? Or was it due to habits and lifestyle choices that may need to be reviewed?

If you haven't been able to build an emergency fund, is it because of a lack of sufficient income, poor spending habits or mounting debt?

Whatever the cause may be, you have to identify the problem before developing a course of correction.

About Adviser Intel

The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

It might be time to create a budget

If you're struggling to make ends meet and save, it's time to create a budget. (You can use Kiplinger's household budget calculator to help.)

Take inventory of the cash that's coming in vs what's going out. Then, make cuts where you can.

Small lifestyle changes, like reducing the number of times you eat out, working out at home or outdoors instead of paying for a gym membership or dropping streaming subscriptions you don't use regularly, can help you save a few extra dollars that can be put toward savings or used to pay down debt to free up cash flow for saving.

If you're behind on bills, have a conversation with your creditors, lenders and landlord to explain your situation. Life happens, and you are not the only one it happens to.

A lot of people feel like they can't do this, but the reality is you have nothing to lose and everything to gain.

By taking the initiative to have this conversation, it shows that you're aware of what's going on and are taking the proper steps to still be accountable and fiscally responsible. You're not just missing payments because you've simply stopped caring.

Once you let your creditors, lenders and landlord know what's going on, they should be much more willing to work out a plan with you.

It is important to note that taking a payment deferral may come at a cost. For example, interest will likely still accrue, which means you'll pay more overtime. Some deferral programs may even require you to pay a lump-sum payment at the end of the deferral period.

Before agreeing to anything, ask detailed questions about penalties and interest. The key is to take action.

If you sit in denial, late payments will start being reported to the credit bureaus, and your credit score will suffer. From there, it's easy to fall into a downward spiral.

Consider a side gig

It's also a good idea to look for ways to generate additional income. The gig economy is booming with rideshare and food delivery services, personal shoppers, even dog walkers and errand runners.

A lot of these side hustles have flexible hours that allow you to work as much or as little as you want.

Finding the work may take a little bit of creativity and effort, but the internet is a great place to start.

If you do find a side hustle, limit work hours so they don't affect your main job or other responsibilities, schedule downtime to prevent burnout and review your employer's policies when it comes to outside employment to prevent any potential conflicts.

Making additional income may also come with tax implications, so it's a good idea to check with a tax professional before taking on additional paid work.

Develop your skills or look for a higher-paying job

If tapping into the gig economy doesn't sound appealing, consider looking for ways to further develop your skillset or switch industries to increase your income.

Once your income stabilizes, it's time to rebuild, or build, your emergency fund. Start small. Determine an affordable amount to set aside each pay period and stick to it.

Consistency is more important than the dollar amount you're saving each time.

If you've dipped into your savings more than you'd planned or were forced to put some expenses on credit cards, you aren't alone. Times are tough, and many people are facing economic pressure.

In order to get back on track, you must take action and prioritize your emergency fund. Without one, achieving financial stability is much, much harder.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Bruce has been a trusted professional in the financial services industry since 1988, offering a comprehensive and macroeconomic perspective on wealth management. With a focus on the Efficient Frontier, Bruce strategically guides clients toward optimizing their investment portfolios to balance risk and return. He takes a holistic approach, understanding that every financial decision has ripple effects across multiple areas of a client's financial life.