Emergency savings

Emergency savings are an essential part of your financial planning. They sit separate from day-to-day cash and long-term investments, providing financial security and freedom to make important life decisions without the pressure of immediate financial survival.

Why emergency savings matter

Unexpected expenses happen to everyone. Medical bills, car repairs, urgent home maintenance—these costs don't wait for payday. Without emergency savings, you're forced to rely on high-interest credit cards or loans, creating debt that can take years to clear.

Emergency savings also protect against income loss. If you lose your job or face a reduction in income, these funds support your living expenses while you find your footing again. This buffer gives you breathing room to make smart decisions rather than desperate ones.

Beyond emergencies, these savings protect your long-term investments. Without a safety net, you might be forced to sell investments at bad times or face early withdrawal penalties. Emergency savings let you keep your investment strategy on track regardless of life's surprises.

Finally, they enable important life decisions. With emergency savings in place, you can make career changes, start a business or relocate with confidence, knowing you have the financial cushion to support the transition.

How it works

Calculate your target amount

Emergency Savings = monthly expenses × number of months

Choose your timeframe based on your job stability:

• 3 months - Stable job in dual-income household

• 6 months - Single-income household or higher job volatility

• 9 months - Freelancers, self-employed, unstable job sectors

Determine your monthly expenses

Add up housing, utilities, communication, food, transport, healthcare, personal care, debt payments and entertainment costs. Tools such as FinWise and 22Seven can help track and categorise these expenses.

Example: If your monthly expenses are R15,000 and you're self-employed, your emergency savings target would be: R15,000 × 9 months = R135,000

Key considerations

Choose an account that meets these criteria:

Easily accessible - No penalties or long wait times to withdraw your money. In an emergency, you need immediate access.

Earning good returns - At minimum, beating inflation with guaranteed fixed returns. Your emergency fund shouldn't lose purchasing power while sitting idle.

Separate from daily banking - A dedicated emergency savings account prevents confusion and mixing with everyday cash. This separation also reduces temptation to dip into emergency funds for non-emergencies.

Fynbos emergency savings

The Fynbos emergency savings account is backed by the Allan Gray Money Market fund, offering the optimal balance of liquidity, security and excellent returns.

Key features:

• Instant access with no withdrawal penalties

• Returns that consistently beat inflation

• Separate from your everyday banking

• Simple management through your Fynbos dashboard

Getting started

1. Calculate your target amount using the formula above

2. Add up your current accessible savings (excluding funds earmarked for specific goals like house deposits or holidays)

3. Open a dedicated emergency savings account that earns good returns

4. Set up automatic monthly contributions if you haven't reached your target yet

Review & maintenance

Review your emergency savings plan annually to ensure you have the right amount saved and that your funds are in the optimal account as your life situation changes.