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Rebuilding an emergency fund

Your rainy day came and went, so consider these points when you start saving again.

Boy on bed with his piggy bank

Take heart if you're recovering from a financial disaster. Rebuilding your emergency fund may actually be easier the second time around.

After all, if you've used your emergency fund, you now know the value of having one, which may make the sacrifice involved in any kind of saving a little more palatable.

Use what you learned

You also have the benefit of knowing exactly how well your emergency fund worked for you. Was your money easily accessible? Was the amount you saved sufficient? Did you have to rely on credit cards to fill in the gaps?

Expenses especially are easy to calculate during good times, but it's not until your budget truly is tight that you're able to easily draw the line between needs and wants. Plus, if you were able to cut excessive spending and live without those unnecessary items already, you can continue to do so.

Don't delay saving again

You should begin the rebuilding process as soon as possible. As tempting as it may be to put emergency fund saving off and splurge on those luxuries you may have denied yourself, you never know when another financial disaster could strike. And you're not being pessimistic to expect one.

Your initial goal might be to get your emergency fund back up to $1,000. That amount is enough to get you back on the right path and give you some peace of mind.

Once you've reached your initial $1,000 goal, you can work upward toward your base. This time around, you can use your recent experience to set an amount that you're comfortable having as a base for your emergency fund. Ask yourself how short you were (if you were), and try to figure out why.

It may take a while to reach your ultimate goal — but if you remember correctly, building an emergency fund took time, too.

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