Emergency Savings Fund! How Much Is Enough?

“Those who prepared for all the emergencies of life beforehand may equip themselves at the expense of joy.” — E. M. Forster

No matter how good things are, it can always go bad. It could be a family emergency, a medical exigency, or a car breakdown. You could weather these storms with an emergency savings fund.

Emergency savings fund

An emergency savings fund is money you’ve set aside to help cover the cost of any unexpected expenses. Accumulating an emergency savings fund can offset some of these expenses so you don’t have to be distressed.

Still, there are a lot of people in Australia who have no savings to fall back on.

People may have saved for at least a month’s expenses. But is this enough?

How much should you have?

Depending on certain situations, you’d obviously want to save up between 3 and 6 months’ worth of expenses, at the very least. By estimation, this is how long it takes for people to find a new job. It’s just wise to have some cash set aside during this time to pay for food, utility bills, and rent, among others.

At this point, you may have ballparked how much you spend within a 3-6 month period. This is how much you should have in your emergency savings fund and then some.

Budgeting and savings apps such as Goodbudget can help to track your spending effectively.

Goodbudget is based on the envelope budgeting method. It’s an expense tracker and money manager that’s great for home budget planning.

Goodbudget app

App Store     Google Play

Starting an emergency savings fund

You can now start an emergency savings fund. Follow these tips in setting up this goal:

  • look for a high-interest savings account
  • set up automatic transfers
  • create a cash buffer (optional)
Look for a high-interest savings account

A high-interest savings account is one of the best places to put your emergency savings fund.

A high interest savings account is an account that offers a competitive interest rate. Although it is similar to a bank account, it’s designed to help you save money rather than spend it. The compound interest is calculated daily and paid monthly.

Note: ‘High’ is around 3.00% p.a. in interest.

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Set up automatic transfers

Once you’ve set up your high-interest savings account, you can either deposit a lump sum (months’ worth of living expenses) or slowly build up to this amount through automatic transfers. You can also deposit a smaller lump sum, $1,000 or so, to your emergency savings fund to give it a headstart.

Create a cash buffer

This is optional, but can be used for smaller emergencies like replacing a laptop. Small amounts of cash ($5 a week) could be a lifesaver in a situation where you can’t access the money in your bank account.

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Emergency loans from Cigno

Do you require a fast and small money credit during an emergency as you’re fund wouldn’t suffice?

In this case, Cigno Loans act as a helper, with an easy application process — as well as management of emergency loans or bad credit loans, if you have a less than stellar credit history.

Once endorsed, cash is moved into your bank account with repayments easily arranged.

Note: You’ll thank yourself in the future for starting an emergency savings fund. Just be mindful where to use it — for emergencies.

Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.


Ordered by the Federal Court of Australia

The Federal Court of Australia has found that Cigno Australia Pty Ltd (Cigno Australia) and BSF Solutions Pty Ltd (BSF Solutions) have breached the law by engaging in unlicensed credit activity and charging prohibited fees.

In the period from July 2022 to 3 October 2023, over 100,000 consumers have been lent a total of $34 million, and charged fees of over $70 million, under the ‘No Upfront Charge Loan Model’ operated by BSF Solutions and Cigno Australia. At no time has either BSF Solutions or Cigno Australia held an Australian Credit Licence.

The Court also found that Mark Swanepoel (director of Cigno Australia) and Brenton James Harrison (director of BSF Solutions) were involved in these breaches of the law.

With effect from 24 May 2024, the Court has granted permanent injunctions preventing Cigno Australia and BSF Solutions from:

  • demanding, receiving or accepting fees or charges, including amounts of loan principal, from consumers in relation to credit provided under the ‘No Upfront Charge Model’; and
  • engaging in further credit activity pursuant to the ‘No Upfront Charge Loan Model’, including by entering into new agreements with consumers, for so long as they do not hold an Australian Credit Licence.

Cigno Australia was ordered by the Court to, by 5th July 2024, send written communications to consumers who between July 2022 and December 2022 entered into agreements with Cigno Australia and BSF Solutions under the ‘No Upfront Charge Loan Model’.

The Court will later determine whether (among other things) Cigno Australia and Mark Swanepoel ought to pay a pecuniary penalty in respect of this conduct, and whether Mark Swanepoel should be restrained from carrying on a business engaging in credit activity.

Cigno Australia, BSF Solutions, Mr Swanepoel and Mr Harrison intend to appeal the decision of the Court and have filed an application for leave to appeal. If the appeal is successful, some or all of the orders of the Federal Court of Australia may be set aside.

Where can you get more information?

Where to go for further support

You can access legal advice in your state at: Free legal advice – Moneysmart.gov.au.

If you are experiencing trouble with debt, or money worries in general, contact:

  • the National Debt Helpline on 1800 007 007 or online chat (9:30am to 4.30pm, Monday to Friday).

If you need someone to talk to, contact:

  • Lifeline on 13 11 14 (24 hours) or their crisis support online chat or
  • Beyond Blue on 1300 22 46 36 (24 hours) or their webchat