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Savings Foundations & Emergency Funds
The first book to read on saving. It explains why saving feels hard and how to make it automatic, how much to save, how to size and build an emergency fund, where to keep savings safely, and how to turn goals into a monthly plan that runs on its own.
Chapters8
Reading time45 min
Worked examples24
Updated2026-10-01
What you will be able to do
- Set up automatic saving that does not depend on willpower, and measure your savings rate.
- Size an emergency fund from your own essential spending and circumstances, and build, protect and refill it.
- Decide whether a sum of money should be saved or invested, based on when you will need it.
- Compare savings accounts, CDs, Treasury bills and I bonds on safety, access, yield and tax.
- Turn goals into monthly amounts and put them in a priority order with an employer match and tax-advantaged accounts.
Contents
8 CHAPTERS · ABOUT 45 MIN- 01Why Saving Feels Hard and How to Make It Automatic The mental shortcuts that make saving harder than it should be, and the systems that work around them: paying yourself first, changing defaults and friction, naming accounts, and saving raises before they are spent.6 min2 computed
- 02How Much to Save How to measure your savings rate, what the 50/30/20 split and other rules of thumb assume, why a few percentage points change the timeline so much, and how to raise your rate one step at a time.6 min4 computed
- 03Sizing Your Emergency Fund What an emergency fund is for, how to count the essential spending it must cover, how many months suit your income and household, and a job-loss method that builds in benefits and health insurance costs.5 min3 computed
- 04Building, Protecting and Refilling Your Emergency Fund A staged way to build the fund, what using a credit card instead would cost, ways to find the money faster, how to keep the fund separate and hard to raid, and how to refill it after an emergency.5 min3 computed
- 05Saving Versus Investing: Matching Money to Time The different jobs saving and investing do, why your time horizon decides which a sum of money needs, what the extra return of investing is worth over short and long periods, and the quiet cost of inflation.5 min4 computed
- 06Where to Keep Your Savings How deposit insurance works, how high-yield savings, money market accounts, CDs, Treasury bills and I bonds compare on safety, access and yield, what a better rate is worth, and how interest is taxed.6 min3 computed
- 07Turning Goals into Monthly Savings Plans How to turn a vague goal into a monthly amount with a date, use sinking funds for predictable bills, compare saving ahead with borrowing, divide money among several goals, and track progress.5 min3 computed
- 08Putting It Together: Your Savings Plan A widely used order of saving priorities and when it changes, why the employer match comes early, how 401(k)s, IRAs and HSAs fit, and how to automate and review the whole plan.6 min2 computed
CALCULATORS USED IN THIS BOOK