If your emergency fund target feels too big to start, you're not broken and your goal isn't wrong. The number just hasn't met the right first step yet. Here's what happened when I stopped trying to start big and started saving $20 a month instead.
Key takeaways
- Starting with a tiny amount works better than a "real" one because it removes the decision and builds the habit.
- Once you're saving every month, you start spotting money you didn't know you were losing: forgotten subscriptions, drifting food spending, small fees.
- Channel found money straight into your savings transfer so it doesn't disappear back into general spending.
- Starting small isn't a compromise. It's the mechanism that makes everything else work.
Why I started with $20 a month
My emergency fund target felt too big, so I kept putting it off. Months went by like that. One month I just got tired of postponing it and decided I wanted to start, even if it was small. So I picked an amount I couldn't argue with: $20, once a month, set up as an automatic transfer the day after payday. That one tiny decision was the ice breaker. I finally stopped postponing, and it helped me build the habit of saving money.
The first month felt like nothing happened
And honestly, nothing did. Twenty dollars left my checking account and showed up in my savings account. I noticed the transfer for about five seconds. Then I forgot about it. That's actually what I wanted. The whole reason starting small works is that a small amount doesn't trigger the part of your brain that wants to cancel the transfer or move the money back.
Then something shifted in month two
The second transfer happened the same way as the first. Automatic, ignored, easy. But something else had changed: I'd started paying attention to my money in general. Not in a stressful way. That tiny transfer had turned saving from a decision I had to make every month into a habit that ran on its own.
How "found money" started showing up
Once I was paying attention, I started spotting money I'd been losing for months. The first thing I noticed was around $30 a month in app subscriptions I'd stopped using a long time ago but had forgotten were still charging me. Then I started catching the small online purchases. Little things I didn't really need, things that weren't worth the money once I actually thought about them. After that, the big one: my takeaway spending was way higher than I'd realised.
None of those felt dramatic in the moment. But together they added up to more than my $20 transfer. And here's the part that surprised me: I only found them because I was looking. Six months earlier, the same charges had been hitting my account and I'd scrolled right past them.
What I did with the found money
I bumped up the transfer. Every time I cancelled an old subscription or caught myself about to buy something I didn't really need, I moved that amount onto my automatic savings transfer the same day. The forgotten apps went, the transfer went from $20 to about $50. A few weeks of skipping the impulse buys, another bump. Cutting back on takeaway was the biggest one, and it pushed the transfer higher again.
This is the part most people miss. If you don't move the found money straight into savings, it disappears. It goes into "general spending" and you never see it again. Cancelling a $15 subscription doesn't save you $15. Cancelling a $15 subscription and adding $15 to your automatic transfer saves you $15.
The leaks I'd recommend looking for first
If you want to do this yourself, the easiest place to start is your last three months of bank statements. Look for anything recurring that you don't remember signing up for, and anything you signed up for during a free trial. After that, look at your food spending. Most people I know lose more money to drifting food spending than to subscriptions, but subscriptions are faster to fix.
I track all of this in the budget spreadsheet I use. It's the easiest way I've found to see what's coming in, what's going out, and where the leaks are, all in one place.
Why starting small is the actual trick
Starting at $20 a month wasn't a compromise on my goal. It was the move that made the goal possible. The small amount got me past the "I'll start saving when I can afford to save properly" trap. The automatic transfer turned saving into a habit instead of a willpower battle. And the habit turned me into someone who actually looks at where her money is going, which is where the real savings came from.
If I'd waited until I could "afford" to start saving $200 a month, I'd still be waiting. Instead, six months in, I was saving more than that without changing my income or feeling deprived. The $20 wasn't the goal. It was the door.
Start with an amount you can't argue with
If your savings target feels too big, pick a starting amount so small it feels silly. Five dollars. Twenty dollars. Whatever number you can't argue with. Set up the automatic transfer the day after payday. Then start looking at where your money is actually going, and move what you find straight into the transfer.
If you haven't set your target yet, the free emergency fund calculator I built can do the math for you so you're not guessing.
The one thing to remember
You can't find money you're not watching. The transfer is what gets you watching, and the watching is what grows the transfer. If you want a head start instead of building one from scratch, the budget spreadsheet I use does this work for you out of the box. It's the same one I open every month to spot what's leaking and where to send it instead. Get the budget spreadsheet here.
