How to Stretch Your Emergency Fund

3 Ways to Make the Most of Your Savings During a Pandemic

By Emily Elmore | 13 April 2020

At Nav.it, having an Emergency Fund is one of our three pillars to financial health. A global pandemic -or any other health emergency- is exactly why it’s important to prioritize emergency savings. This fund provides safety and supportive cash when unexpected events occur, like furloughs or travel disruptions. It also provides psychological support in times of stress, giving us time to figure out our next financial move without losing critical access to housing, transportation, or the capability to pay our bills on time. 

Ideally, an emergency fund has 3-6 months of savings. In reality, most households are unable to save more than a month or two. In just three weeks, nearly 17 million Americans have filed for unemployment due to the financial crisis brought on by Covid-19. What can you do if your emergency funds are quickly disappearing?

1. Make a crisis budget.

Figure out how much money you have accessible until regular income is back in the picture. This total should include your emergency fund, but may also include what remains in your checking or other savings accounts. Consider alimony and child support, as well as any passive income streams that remain in place. Determine which items are essential. These usually include the following:

  • Housing
  • Food
  • Basic Utilities (water, electric, trash, oil or gas) 
  • Transportation

2. Reduce your spending.

Review your crisis budget and cut all unnecessary spending. This probably includes cable, streaming in all its forms, and subscriptions. Determine how you can lower the cost of the essential items. You can save on groceries just by switching to generic brands or buying in bulk. Spring weather may also give you the opportunity to cut back on electric and oil/gas bills.Many small changes can add up to several hundred dollars or more.

Tip: Don’t forget to put automatic bill payment drafts on pause if you’re making adjustments to your normal bill-paying habits. 

You can also look at recurring bills and see if you can negotiate a better deal.  Interest rates have reduced since this crisis, and if you have debt –particularly home loans or personal loans, talking to a banker about refinancing your loan to a lower interest rate and monthly payment can help take the pressure off your expenses. For credit cards, consolidating your balances into a 0% APR card can help reduce your interest payments. Make sure you try and pay off your balances by the time the 0% promotion is over. 

Many lenders are reducing fees and letting customers pause or reduce payments for a period of time during the COVID-19 crisis. Some lenders and servicers, especially in the mortgage space, are requiring borrowers to repay the skipped payments in a lump sum when the forbearance period ends, which could create new problems later. Make sure you understand the terms and conditions of any loan relief offers. 

3. Look for new opportunities to earn.

Easier said than done? We hear you. Even if you did an awesome job building your emergency fund, those savings aren’t unlimited. You’ll need to replace that income you’ve lost. If you can’t do this now due to the pandemic, it’ll definitely serve you well once the economy recovers. 

First, consider applying for unemployment benefits as soon as you’re laid off or furloughed from your job. Your first unemployment check can take several weeks to arrive. In addition to state benefits, unemployed workers will receive an extra $600 per week from the federal government for a period of four months, thanks to the CARES Act. This won’t replace your income, but it can help augment your emergency fund.

Next, there are numerous websites that can help you find work-from-home jobs (both full-time and freelance) that you can do from the safety of your own home during the pandemic. You also can find thousands of new jobs that are being created in response to the coronavirus. 

(Pst… check out great side hustle options here.)

Finally, if you’re expecting a stimulus check, make a plan for how you’ll spend the cash before it arrives. Whether you use the funds on basic essentials, pad your emergency savings or stay current on your debt payments, the money will stretch further if you determine your immediate financial priorities. 

Ultimately, no one knows how long it will take the economy to rebound from Covid-19. The Federal Reserve Bank of St. Louis estimated that U.S. unemployment could exceed 32%, far outpacing unemployment during the Great Depression. And yet we’ve never been a more agile workforce, or capable of working remotely to the extent we are today. 

Whether life returns to normal sooner than expected or the crisis grows more serious, one fact is certain. You’ve got this.  The minute you start really digging into your spending is the minute you start taking full control of your financial health and getting creative about how you spend and save.  Set up a goal through Auto-Saves inside the nav.it money app. Start small ($5 a week counts!) and enjoy those wins, then increase your goals as you build the habit of saving.  When you have extra cash in savings—even a small amount—you’re in a better position to weather whatever situation comes your way.


We’re changing the narrative around money but change can’t happen with a one-sided conversation. That’s why we’re excited to bring different voices and experts to share their wisdom inside the Community. Send us an email and let us know what you think. And remember the nav.it money app offers you free tools like debt repayment calculators and checking in and managing your money moves.

You can download it at Google Play and the Apple Store.

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