Foundations

How to build an emergency fund

Quidsmith Guides · Updated 2026-07-03 · 5 min read

Game context, not financial advice. This article explains how things work inside Quidsmith, a personal-finance simulation game. The numbers are illustrative and the model is simplified for play. It is not personal financial advice. For decisions about your own money, speak to a regulated adviser.

Every 2 to 5 turns, Quidsmith throws an unexpected expense at you. It comes straight out of your current account, and it does not care what your net worth is. An emergency fund is how you take that punch without going down.

Why it matters more than it looks

The cost of an unexpected event scales with how long you have been playing, roughly £1,000 for every year survived. At 30 that is a nuisance. At 75 it is a serious bill. If your current account cannot cover it, the game opens a liquidation screen and you must sell investments to make up the shortfall, frequently at the worst possible moment.

A typical unexpected-event bill rises with every year played. The buffer that felt generous at 30 is nowhere near enough at 70.

Selling under duress is the hidden tax. Time-locked savings accessed early forfeit their interest and take a 2% penalty. A crashed ETF sold to cover a boiler repair locks in the loss. Pensions are simply unavailable before 57. The emergency fund exists so none of that has to happen.

How big should it be?

In real life the rule of thumb is three to six months of expenses. Quidsmith rewards the same instinct, but the target should grow as you age because the bills do. A practical approach:

Early game: hold enough to cover one typical event plus a little slack, so a single shock never touches your investments.
Mid game: scale the buffer up as the £1,000-per-year figure climbs. What covered you at 40 will not at 60.
Retirement: keep a larger cash cushion so a bad market year and an unexpected event in the same turn do not force you to sell equities at the bottom.

Illustrative buffer targets rising with age. The exact figure is up to you; the shape, growing over time, is the point.

Where to keep it

An emergency fund has one job: to be there, in full, the instant you need it. That rules out anything that can fall in value or lock you out. In Quidsmith the natural homes are:

Easy Access Savings or a Cash ISA, both instantly available, the ISA sheltering the interest from tax.
Premium Bonds can play a partial role, instantly cashable and tax-free, though the returns are a gamble around a modest average.

What an emergency fund is not is your Global ETF. The whole point is that it holds its value on the exact turn the market does not.

The order of operations

A small starter buffer usually comes before aggressive investing, and even before clearing all but the most expensive debt. Being forced to liquidate at a loss, or worse, hitting £0 and ending the run, undoes far more than a slightly slower start. Build the buffer, then build wealth.