The Smart Resident’s Guide to Emergency Savings—in 5 Fast Moves

🚨 Why an e-fund matters—yes, even on a resident’s salary

What exactly is an emergency fund?

Think of it as your financial PPE: a stash of cash, separate from checking and investments, that covers truly unplanned hits—job delay, family crisis, broken transmission.

The idea dates back to post-Depression personal-finance manuals, but it was popularized for doctors in the 1990s when rising med-school debt met stagnant resident pay. Unlike a “sinking fund” (saving for known expenses like board fees), your e-fund stays untouched until life goes sideways.

Sixty-hour weeks, $200k+ of loans, and co-residents flashing new Teslas can trick you into thinking “I’ll save later.”

COVID taught us white coats ≠ immunity from financial curveballs.

Let’s chat about Emergency Funds this week.

1⃣ How big should your emergency fund be?

Set your target based on your career stage and needs. Ideally, you should target 6 months of living expenses to have in your emergency fund.

Rule of thumb: Start with expenses, not income—don’t forget loan payments and childcare.

2⃣ Where to park the cash (2025 yields)

3⃣ Build it without killing your budget

• Moonlighting earmark: Funnel 50% of every extra shift straight to savings—out of sight, out of Starbucks range. Do this until you hit your target.

• Sign-on bonus split: Average bonus ≈ $30k—carve off the first $10k before lifestyle creep.

• Automate: Set an auto-transfer on pay-day. Every banking app with a high-yield savings account has this feature. Enable it. Friction is enemy #1.

• Quarterly top-up: Re-check spending every 3 months; bump the target when rent, daycare, or loan payments rise.

4⃣ Quick FAQ

Should I invest my emergency fund in the market?
No. Volatility ≠ emergency-ready.

What bank do I choose? There’s so many options
We won’t make a specific recommendation here, but you can’t go wrong with the top savings apps like Ally or Marcus, or setting up accounts with trusted banks like Capital One, Chase or other.

Invest it in index funds (groups of stocks) for “better growth”?
Emergency money’s job is speed and certainty, not returns. Stick to cash-equivalents <12 month duration.

5⃣ This week’s 3-step challenge ✅

1. List actual monthly expenses (use the last bank statement, not vibes!).

2. Open a separate high-yield savings account (HYSA) and initiate a $200 auto-draft. Then, set up a recurring amount each month to deposit. Start with $100/mo!

3. Schedule a 15-min calendar reminder in 90 days to raise the transfer.

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M&H