1 Fullerton Credit Pte Ltd is a licensed moneylender (License No. 100/2023) listed in the Registry of Moneylenders, under the Ministry of Law in Singapore.

Why Every Singaporean Needs an Emergency Fund


While an occasional splurge is one way to reward and motivate yourself, there are instances when unmindful squandering of money gets you into trouble, especially when faced with a difficult situation such as job losses, accidents, and injuries. Without an emergency fund, covering the cost during unforeseen circumstances is such a challenge.

Unfortunately, for some Singaporeans, saving up for rainy days often has to take a backseat. Unprecedented situations like the COVID pandemic can test whether or not you have financial cushioning. The SARS outbreak, for instance, left 24,000 Singaporeans unemployed, according to Channel News Asia.

What is an emergency fund?

In a nutshell, an emergency fund is the amount of money that covers your expenses during a financial crisis. Anyone can suffer financially if you do not prioritize emergency funding.
You gain greater peace of mind when you have a safety net of cash because you do not have to think about the serious impact of a major crisis.

Purpose of emergency funds

  • Medical Emergency – When you get sick, taking leave from work is necessary so you can undergo proper treatment. However, the costs that checkups and treatment will incur can leave a dent in your wallet. When your income has been seriously affected, an emergency fund is imperative.
  • Job Loss – Losing your job is a sad reality that many people had to face amidst the COVID-19 situation. If an employment opportunity has not come your way, an emergency fund will be able to help you fulfill your financial obligations.
  • Household Issues – Natural disasters can strike even when you least expect them. This is why it is important to set aside money for repair or renovation. Fires and flooding can become more expensive than you expected.

Fallen jar with saving word and symbol on wooden cube

Why do I need an emergency fund?

  • It prevents you from reallocating your extra money.

If you are saving up for a family vacation or to buy something for yourself, having emergency funds Singapore will prevent you from reallocating your money. When unexpected expenses have eaten away your retirement funds, you have to work longer or even depend on your children as you get older.

  • It helps you remain prepared in challenging situations. 

No matter how you try to keep things under your control, there are still instances when you are confronted by inevitable situations such as meeting an accident Your income may not be permanent, but your monthly expenses are here to stay. 

  • It keeps you financially secure. 

When you do not have an emergency fund Singapore at your disposal, you will resort to borrowing money from family or friends. You may even take out a loan or use your credit card during a life-altering calamity. However, this is not a good practice to follow because this vicious cycle never ends.


  • Emergency savings provide greater peace of mind during a financial crisis
  • Earns interest when kept in a bank
  • Does not require the selling of bonds or stocks as cash is liquid
  • Easier fund transfer or withdrawal


  • Having easy access to cash might result in dipping into it for non-emergency reasons

Putting coin in a glass jar

How much emergency fund should I Save?

In theory, emergency funds should cover three to six months’ worth of expenses. You can start your beginner emergency fund by saving up a few hundred dollars. It is also important to keep several factors in mind such as the number of cars you lease or own, family size, job stability, and whether you rent or own a home. Your emergency fund is like insurance because it protects you and your family if anything goes wrong.

How to build an emergency fund

Since you need to have at least three months’ worth of expenses, you will need to save at least $3000 a month from your monthly income as this is the minimum amount to cover your food, gas, utilities, rent or mortgage. However, if you have financial dependents like your spouse or children, you need to set aside six months of your income.

If your job has a high injury or high turnover rate, you will have to double your emergency fund amount. Once you get better at saving your bills, make sure you have 12 months of your living expenses in your savings accounts. For high-wage earners, having liquid assets is necessary whether for opportunities or emergencies.

It is best to have a separate savings account or checking account for your emergency fund, especially if it earns interest. When you let the funds grow in your savings account, you can use it for future emergencies like a medical bill or car repair. You will also need to automate your emergency fund so you can closely monitor your savings per month.

Sources for emergency funds

Line of credit or credit line – A line of credit refers to a flexible loan from a financial institution or bank. It is similar to a credit card because it offers a limited amount of cash. Even though you can access the money as needed, you will need to repay it immediately. Keep in mind that credit lines are not intended for one-time purchases such as cars or houses. Its main purpose is to cover financial emergencies.

Credit card cash advance – If you do not have available cash on hand, tapping into cash advances is the usual solution to consider. A credit card cash advance enables you to access cash in an instant. However, you have to keep in mind that a cash advance is not free as it comes with higher interest rates. As soon as you take the cash, your cash advance will immediately start accruing interest.

Instant cash loans – With this source of emergency fund, you will need to repay the funds owed over a short period of time. The interest rate is higher compared to other types of loans. Having a bad credit score? Besure to check out how to improve bad credit score to get loan.

banknotes and magnifying glass

How to find the best moneylenders that offer an emergency loan

Lender Features- Be sure to check the payment options and other basic features. There are lenders who will let you choose your payment due date and will allow you to miss a payment during repayment without incurring late fees. Be sure to check out licensed vs unlicensed private money lender Singapore to avoid borrowing from an unlicensed moneylender.

Funding Speed-If you need to get cash immediately, taking out a loan from an institution that will make the funds available from one to a few days is the best way to go. You will have an idea of what to expect before you consider applying for a loan as most online lenders will disclose how long it takes to release the money.

Loan Costs-You will have to compare annual percentage rates and fees, which you can check during the pre-qualification process. Having a preview of the rate and terms will help you decide the type of emergency loan that is right for you.

When it comes to taking out a loan, nothing is more secure than putting your trust in a licensed moneylender like 1 Fullerton Credit. Not only do they provide efficient processing of applications, but they also provide relatively low interest rates.

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