Many Canadians started 2024 with a solid financial plan, while some were waiting for the economic situation to improve. For those lacking an emergency fund, the stress of being unable to cover unexpected expenses was on the rise.

A Global News article from earlier this year reported that 70 percent of people are concerned about their ability to handle unforeseen expenses exceeding $1,000, while more than half (53 percent) fear they may not have sufficient funds to provide meals for their families.

The good news is that building an emergency fund can reduce the stress of not being financially prepared.  An emergency fund is a critical component of many financial plans. It is a safety net, providing financial security during unforeseen circumstances such as job loss, medical emergencies, or unexpected home repairs.

However, building an emergency fund can be challenging, especially if you live paycheck to paycheck or face financial constraints. This is where online loans can come into play, offering a temporary solution to kickstart your emergency fund. Use this blog to learn the basics of building an emergency fund and learn how to use online loans to kickstart your emergency fund.

What is an Emergency Fund?

As leading online lenders in Canada, we believe good financial health begins with knowledge. Before you start building your emergency fund, you must understand the concept of using this essential financial tool.

Emergency funds are a reserve to cover financial surprises or unexpected expenses. They act as a buffer, shielding you from the need to dip into savings earmarked for other goals, like retirement or a down payment on a house. Essentially, they’re your financial safety net, providing peace of mind and stability during turbulent times.

An emergency fund means you can weather unforeseen circumstances without using high-interest loans or accumulating credit card debt. It allows you to maintain financial stability and avoid financial distress during challenging times.

How Much Should You Have in an Emergency Fund?

Many people ask a common question when organizing their finances: How much emergency fund should I have? The appropriate size of your emergency fund depends on various factors, including your monthly expenses, income stability, and individual circumstances.

It is typically recommended to save three to six months of living expenses. However, if you have dependents or work in a volatile industry, you might aim for a larger cushion – up to nine months’ worth of expenses.

Another similar concern arises: how much should I put in my emergency fund per month? Well, there is no right or wrong answer to this question. The key to choosing the ideal amount to save each month is assessing your situation realistically and striving to save accordingly. Consider factors like job security, health status, and potential expenses like home or car repairs. Adjust your emergency fund target to ensure adequate protection against unexpected financial challenges.

You can use loans from FlexMoney to kickstart your fund by applying for a small loan online. When you receive the funds, add them to your fund and gradually pay them off within the repayment time frame. Once you start the fund and add money to your account, think about whether you can continue saving that same amount from your income each month.

Where to Keep an Emergency Fund?

Accessibility and safety are essential when deciding where to stash your emergency funds. While traditional savings accounts offer liquidity and security, they often yield minimal interest. Consider high-yield savings or money market accounts, which typically provide better returns while maintaining easy access to your funds.

Alternatively, you could explore certificates of deposit (CDs) for higher interest rates, though these may come with penalties for early withdrawal. Evaluate the trade-offs between accessibility and returns to find the best option. The key is balancing liquidity and growth while keeping your emergency fund available when needed.

How to Use Online Loans to Kickstart Your Emergency Fund?

Online loans can be a valuable tool for jumpstarting your emergency fund, especially if you cannot save a substantial amount upfront. Here’s how to navigate this option responsibly.

Assess Your Needs

Before applying for an online loan, evaluate the urgency and magnitude of your financial need. Is it a genuine emergency, or can it wait until you’ve saved enough? Be mindful of borrowing only what you truly require to avoid unnecessary debt.

We offer several types of Canadian emergency loans, but we request that you assess your needs before you apply. Our goal is to help you better manage your debt without the added stress, so it’s vital that you determine how much money you need to start building a fund before exploring emergency loans in Canada.

Research Lenders

Not all online lenders are created equal. Before you apply for emergency cash loans, take the time to compare interest rates, repayment terms, and customer reviews from reputable sources. Opt for licensed online lenders like FlexMoney with transparent fee structures and favourable terms to ensure a smooth borrowing experience.

Borrow Responsibly

When you want to get an emergency loan, only borrow what you can afford to repay comfortably within the specified timeframe. Avoid borrowing more than necessary or extending the loan term, as it could lead to accumulating interest and prolonged debt repayment.

Use the Loan to Seed Your Emergency Fund

Once you’ve secured the loan, allocate the proceeds directly to your emergency fund. Treat it as a one-time boost rather than a continuous funding source, focusing on replenishing the fund through regular savings contributions.

Create a Repayment Plan

Develop a structured debt repayment plan to eliminate the loan balance efficiently. Consider automating payments or setting reminders to avoid missing due dates and incurring late fees. If feasible, aim to pay off the loan ahead of schedule to accelerate your journey toward financial stability.

Other Ways to Deal with Financial Emergencies if You Don’t Have a Fund

If you are facing a financial emergency without an established fund, here are some alternative strategies to help you navigate the situation.

Integrate Loan Repayments into Your Budget

Factor loan repayments into your monthly budget to ensure timely payments without sacrificing other financial obligations. For instance, if you’re taking loans for car repairs, think about the overall cost of the repair and how much money you want to take out of your monthly paycheck to make payments.

Prioritize clearing the debt as soon as possible to minimize interest costs and free up funds for building your emergency fund.

Negotiate Payment Plans

Contact creditors or service providers to negotiate flexible payment arrangements or hardship plans. Many organizations will accommodate temporary financial setbacks by extending deadlines or reducing minimum payments.

For instance, if you have taken personal emergency loans from FlexMoney, contact our customer service team as soon as you realize you cannot pay the loan back on time. We will try to change or customize your repayment plan and help you find ideal solutions.

Get a Personal or Emergency Loan

Consider exploring the possibility of getting a personal loan from a reputable online lender like FlexMoney. While it’s not always the ideal solution, a personal loan from a reputable lender can provide the funds you need to address immediate expenses while offering more favourable terms than other forms of borrowing, such as credit cards or payday loans.

You can also take out emergency cash loans to fund unexpected expenses. FlexMoney offers emergency loans in Canada, allowing quick access to cash when you need it most. Learn more about emergencies that may require a loan on our website to determine if obtaining a loan is the right financial step for you.

Be sure to borrow responsibly and prioritize timely repayment to avoid a debt spiral.

Prioritize Expenses

Identify essential expenses and prioritize them over discretionary spending until you stabilize your financial situation. For instance, if you are dealing with unexpected medical expenses, prioritize paying them off by taking a medical loan from FlexMoney if you don’t have an emergency fund yet.

At the same time, cut back on non-essential purchases and luxuries to conserve funds and redirect them toward pressing needs.

Explore Side Hustles or Gig Opportunities

Consider generating additional income through part-time work, freelance gigs, or selling unused items to boost your financial resources and address immediate needs.


Building an emergency fund is a cornerstone of sound financial planning, providing a buffer against unexpected expenses and financial upheavals. While saving for emergencies may seem daunting, leveraging online loans responsibly can offer a viable solution to kickstart your fund and mitigate immediate financial crises. However, it’s essential to approach borrowing cautiously, assess your needs thoughtfully, and prioritize timely repayment to avoid falling into a cycle of debt.