Your Empowering Emergency Fund

Ladies, we need peace of mind. With all the stresses of life, ask yourself what you need to have peace of mind? For many of you, it’s an emergency fund, an “I know everything is awesome and just getting better AND I have a secure cash stash just in case” account. When that fund is big enough, you can be self-insured in many ways. This guidance below is, as usual, not financial advice – just education for you to consider. Do what’s right for you!

Already got an emergency fund? Keep reading for a mindset shift that may surprise you!

Top 3 Peace of Mind Benefits:

1. Financial Security: An emergency fund provides a financial cushion during unexpected events such as medical emergencies, urgent home repairs, or a dip in income. This is especially important for us, because we also care for our elderly parents, our kids’ broken bones, and our partners if they need a mental health break.
2. Independence and Empowerment: How much of your money energy makes you feel empowered? What makes you feel small or unworthy? Having a dedicated fund for emergencies allows you to make decisions without relying on others, and your financial independence there can empower you in other areas of your life.
3. Mitigating Debt: Without an emergency fund, unexpected expenses might lead to increased debt, on credit cards or as loans. An emergency fund helps avoid high-interest debt. Note for some of us: loans from family members can be super high-interest debt, as the emotional toll that takes can be extreme.

Steps to Build an Emergency Fund

1. Set a Goal: Financial experts often recommend saving three to six months' worth of living expenses. Start with a small, achievable monthly goal, even $1,000, and gradually increase it.
2. Budget It: Look at your monthly income and expenses ?- ?how much you can realistically save each month? Where you can cut back or increase your income to allocate more towards your emergency fund? Remember,?it’s just temporary. Once you hit your goal, that extra money can be reallocated, maybe towards vacay?
3. Automate Savings: These have been great for me. Set it and forget it. Set up automatic transfers from your checking account to a dedicated savings account. This ensures consistent contributions and eliminates the temptation to spend the money. ?Not good at saving? Set your account up at a different bank, and don’t get a debit card for that account.?I love (completely online), ally.com.
4. Choose the Right Account: Once it starts to grow, keep your emergency fund in a high-yield savings account or a money market account. These options offer better interest rates than traditional savings accounts and ensure easy access when needed.
5. Prioritize Saving: What we focus on expands. Treat your emergency fund contributions as a non-negotiable expense, similar to housing or utilities. Prioritizing this fund can help build it faster.
6. Review and Adjust: Regularly review your finances and adjust your savings goals as needed. Life changes, like a new baby (or a grandbaby!), or career change, may require you to reassess your emergency fund target.

What if I’m on very limited Income?

Start small and increase contributions as your income grows or expenses decrease – setting your intention signals the Universe that you have the goal. If you don’t believe you can save anything, you’re not going to start.

What if I’ve got several things to save for?

Balancing savings for emergencies with other financial goals, like college tuition for multiple kids or retirement goals, can be difficult. Ask yourself, is it possible? Make a blue sky list of ways to increase your income, what expenses you can cut just for now, and remember that you can pull from one account to another if you have to. Again, the intention will make a big difference, so don’t say it’s not possible or it won’t be!

What if an emergency comes up before my fund is fully built?

Use the money you’ve saved and congratulate yourself because you might have had that emergency without anything allocated! Then start to rebuild that account ASAP.

A note about thinking positively: If I’m saving for a rainy day, aren’t I attracting a rainy day? YES, if you expect it to rain. NO, if you think of it as building towards financial freedom. Look at all you are creating: financial security and freedom, less debt, more independence. Name the account something that makes you feel great, like Peace of Mind, instead of Emergencies. Then relax, knowing all is well.

Blue skies!

Love,

Halle