The emergency has passed, you’re moving out of the worst of it…and you’re staring at an empty savings account, your emergency fund having been completely exhausted.

If this sounds familiar, take a moment to breathe. While stressful, this situation means that your emergency savings did exactly what it was supposed to—it caught you during an emergency, allowed you to keep paying the bills, and prevented you from taking on more debt than you needed to. Using your emergency savings is a success, not a failure.

But now that the dust has settled, how do you rebuild your emergency savings and truly start the road to recovery so that you can be prepared the next time life decides to throw you a curveball?

Assess and Revisit

First, you’ll need to look at how much of your emergency fund you used. Did you use all of it and need to take on some debt? Is some still remaining? This will be your starting point for rebuilding your fund and will help you determine a goal to work towards.

You’ll also want to consider if your emergency left you with ongoing costs. Do you have new medical bills? Did you need to move from a home you owned to rental housing? Do you have a new car payment?

An emergency can upend your life, so once you have those pieces, you’ll want to rebuild your old budget to include the new expenses, and to determine how much you can realistically put towards savings.

While you’re elbow deep in your budget, consider if there are any expenses you can trim, even on a temporary basis. Can you cut back on subscription services? Make your food budget stretch further? Look for a better deal on your car insurance? Think of any place you may be able to cut back, as rebuilding your emergency fund is a financial priority—you can always add them back in later. When you find expenses to trim, direct those savings towards your emergency fund.

As you do this, be sure you’re carefully balancing paying off debt incurred and rebuilding savings—don’t have an all or nothing approach.

Consider using a debt payoff strategy like the snowball or avalanche approach. With the snowball strategy, you pay the minimum on all your debts but make extra payments on your smallest debt. When that debt is paid off, you roll those payments into your next smallest debt and continue until you are debt free. The avalanche approach is the same but focuses on paying off the debt with the highest interest rate first.

Once you’ve determined how much you can earmark for your emergency fund, it’s time to set a new savings goal.

Choosing an Emergency Savings Goal

Was your emergency savings fund enough to see you through? Did you wish you had more set aside? These are important considerations as you rebuild your emergency savings. Work on figuring out how much you may need should the emergency recur, or if a larger emergency occurs. Remember, it’s recommended that your emergency fund contains three-to-six months’ worth of living expenses.

Making it Easier

Rebuilding your emergency fund may feel like an uphill battle when you’re still coming down from the adrenaline high of your last emergency; but there are a couple ways to make it easier.

If your savings goal feels overwhelming, consider breaking it into smaller, more manageable milestones: work up to having $500 in your emergency fund, then $1,000, then one month. Use your budget to figure out when you can feasibly meet each of these milestones. When you do, be sure to celebrate—building emergency savings is hard work, and it’s worth it to acknowledge your successes.

And, consider making contributing to your emergency fund a habit. Think of it the same way you would a recurring bill. Do it consistently as soon as you get paid and, if possible, automate it—set up a direct deposit or transfer into your emergency fund every payday.

Don’t be afraid to start small, either. Contribute however much you are able. For a safety net like an emergency fund, it’s better to build a strong savings habit that you can regularly maintain than it is to make infrequent, large contributions. You can even build savings automatically while you spend with a feature like Round Ups, where your purchases are rounded up to the nearest dollar and the difference is placed in savings.

Open a First Merchants Savings Account
to Start Using Round Ups

That being said, if you do receive an expected or unexpected windfall—tax refunds, cash gifts, or a bonus—consider putting all or part of that in your emergency fund, especially if you’re still in the recovery phase.

Just take your time and take small steps if necessary. Recovering from a major emergency is hard. Just know that you made it through and, in time, your emergency fund will be replenished, so you’ll be prepared if another emergency hits.