How to Build an Emergency Fund without Budgeting

How to Build an Emergency Fund without Budgeting

Google anything about personal finance, and the most common piece of advice you’ll read is “start with a budget.” Budgeting, as we know, is allocating specific amounts for different categories. The most popular of which is the 50-30-20 Rule.

50-30-20 Rule

The 50-30-20 Rule is a budgeting strategy wherein you set your budget in three categories: needs, wants, and savings.

50% of your income goes to your needs. These are the essential expenses you need to survive. Needs include food, grocery, housing, bills and utilities, and transportation for work.

30% of your income goes to your wants. Your wants are the non-essential things that you can live without, but have the option to buy them. Wants include a cup of Starbucks, eat outs, movie tickets, or your Netflix subscription.

20% of your income goes to your savings or investments.

So, if you earn $3,000 per month, you’ll use $1,500 for your needs; $900 for your wants; and $600 for your savings. Budgeting is not too hard, is it?

Does budgeting work?

As you can see, budgeting seems easy to do, but in reality, it’s difficult. Budgeting requires utmost discipline–discipline of staying within your spending power.

I’m pretty disciplined with my finances, and my friends can tell you that I’m a miser and strict with money. But even with my rigidity, I still find budgeting restrictive.

There’s always a tendency to overspend when you limit your expenses. When overspending happens, you reallocate funds from one category to another which means you disrupted your budget. There’s no flexibility in spending.

Is it still possible to build an emergency fund without budgeting?

Yes! I’m a living proof. I’m in my late 20s, and I’ve built myself an emergency fun even without budgeting.

How did I do it? Let me tell you a short story: Before I started working, I read a motivational Warren Buffet picture with a quote that said “Do not save what is left after spending; spend what is left after saving.” Now, that’s how I learned how to handle my finances — I save first before I spend. I started saving 6% of my monthly salary and used the rest for my needs and wants. Sometimes, even after saving and spending, I still get extra money to add to my savings.

Saving first limits your spending power but with much more flexibility. Going back to the example above, if you earn $3,000 monthly and save $1000, you limit yourself to $2,000 spending power. You do everything in your power to stick to the $2,000 you have. You can get your needs covered and overspend on wants without feeling guilty that you spent more than your allocated budget.


There’s no one-size-fits-all approach to saving money. Budgeting is effective for others but restrictive for some. The important thing here is to build your emergency fund as early as possible and in whatever strategy that works for you.

How to Build an Emergency Fund without Budgeting

24 thoughts on “How to Build an Emergency Fund without Budgeting

  1. Thank you – I find this really helpful! Now it is especially important to know how to save and to be aware on how much we spend on our β€˜wants’.

    1. Hi, Sandra! Glad you found this helpful. You’re right, we should control our “wants.” One way we can do it is to identify the essentials. πŸ™‚

  2. YAY! I absolutely love emergency funds as they have saved me time and time again. I love this post – thank you for writing this!

  3. So much yes! This is exactly how I’ve saved over $8,000 this year and paid of one of our cars. Save til it hurts is my motto. Automating you’re savings is a big game changer if you hate budgeting like I do!

    Thanks for sharing, great advice!!!

      1. It’s a good motto to live by! Yes I’m pretty good at saving but I could definitely be better. I need to learn how to shop for food more frugally and get things at a discount.

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