Feeling stressed about your finances? You’re not alone. In fact, 73% of Americans admit to experiencing money-related anxiety.

But here’s the good news: building a solid emergency fund can provide tremendous peace of mind.

In this episode of The Elements of Money Show, our financial coaches Abby and Reese tackle a common (but critical) question from viewer Jackie: “Where’s the best place to save my emergency fund?”

The Perks of a High-Yield Savings Account

While your regular checking account is fine for paying bills and making purchases, Abby recommends stashing your emergency fund in a high-yield savings account.

Why?

These accounts offer significantly higher interest rates (currently 4-5%) compared to traditional savings accounts.

That means the money you work so hard to set aside will grow faster, without any additional effort on your part.

Even seemingly small gains can add up over time!

How Much to Keep Liquid

So what’s the right mix of checking vs. high-yield savings for your emergency fund?

According to Reese, there’s no one-size-fits-all answer. It depends on your personal preference and situation.

Generally, the coaches suggest keeping about 3 months of living expenses (a 0.25 “Liquid Term” score on the Elements financial vital sign scale) easily accessible in checking.

Then, aim to build up to 6 months (a 0.5 score) in high-yield savings before focusing on longer-term investments.

Your Emergency Fund, Your Way

At the end of the day, the most important thing is having a dedicated emergency fund you can tap whenever life throws you a curveball.

The key is picking an approach you can stick with consistently.

And, as Abby wisely notes, where you keep your emergency stash is far less impactful than the life-changing power of simply having one.