You know how emergencies are the worst. 
Root Canal. Tree falls on car. Dog pees on laptop.
That’s all an emergency fund is… a way to plan for the unplan-able. To keep unexpected things from derailing you.
What is an Emergency Fund?
An emergency fund is an amount of money specifically set aside to cover those unexpected costs. Most financial planners recommend between 3 – 6 months income set aside for emergencies.
As a self-employed artist your life is a twisted mire of the unplan-able. I would say closer to the 6 month range would be better, but it all depends what you feel the most comfortable with. As long as you’re sleeping stress free, I’m happy.
How do I build an Emergency Fund?
For most freelancers…. slowly.
Keep in mind. 6 months of salary is the end goal. It can be daunting to think about saving that amount of money. The important thing is just to start. Even 100 dollars will make a difference when something goes wrong.
Setting a savings habit is way more important than the savings amount.
RECOMMENDED READING: BE THE TORTOISE: WHY YOU DON’T NEED (MUCH) MONEY TO SAVE
Where should keep my Emergency Fund?
This fund should be kept in a very low risk place.
Nothing is worse than saving the money, setting it aside, and having it be gone when you need it. Maybe a high yield savings account, or a money market account if you’re feeling adventurous.
The most important thing is making sure you’re able to access your money in an emergency.
TIP: Often your chequing account will waive its fees if you keep a minimum balance it it. If you crunch the numbers often those few bucks will be more than you would make in interest if you put the money in a savings account. It could be a great place to store part or all of your emergency fund.
STILL CURIOUS? CHECK OUT: MANAGING THE UNEXPECTED: THE STORY OF EMERGENCY FUNDS FOR ARTISTS
