Why I Won't Panic When an Emergency Happens. Here's How!

Bad Things Happen in Life

Picture these scenarios 

  • Your car gets a flat as you drive to your cousin's wedding in the middle of nowhere
  • Your dentist lets you know you need a root canal and a crown in January
  • The old refrigerator feels like Miami inside as you go to pull out a cold drink
  • Your boss says, “Thank you for your time here. I’ll write a reference if you need one.” on November 15th, just in time for the holidays

Here’s the bad news: These types of emergencies happen to people everyday and we all know (even if we would like to deny it) that eventually, some unexpected expense will inflict itself on us. Often these events throw us into intense, heart pounding panic and stress. 

But here’s the good news: You can downgrade the emergencies to inconveniences by planning ahead and having an emergency fund in place. You will be able to sleep soundly at night knowing you are prepared to handle whatever life throws at you.

What is an Emergency Fund?

An emergency fund is your financial life jacket. It’s money which keeps you afloat when it feels like the tide is rising and you might go under. If you’re already in debt, this saved money can put a stop to borrowing more. If you don’t have debt (congratulations!) you still need money for those unpredictable surprises that inevitably occur. 

How Big Should My Emergency Fund Be?

The answer really is, “It depends.” However, most experts usually say to have three to six months’ worth of expenses covered. Here are the most important things to be able to pay for when things get really tough:

  • Food and Medication
  • Housing
  • Utilities
  • Health Care (including insurance)
  • Transportation

These needs differ for everyone, so make sure you keep in mind what these costs look like for you, as well as the people you support financially. 

A good rule of thumb is to add these expenses together and then multiply by 3 or 6. This is bare bones but certainly will keep the wolf away from your door. This small emergency fund may not make you feel secure especially if you are:

  • Employed in a high-risk industry where layoffs are common
  • Making a variable income
  • Worried about recession
  • Retired

In this case, go ahead and decide on a bigger number. You can always work on your goal and save more until you are sleeping soundly at night. Be sure to talk with your partner so you both are feeling protected.

How Do I Build an Emergency Fund?

More good news! There are several ways to get started.

  1. Open a separate savings account. Have money from each paycheck directly deposited. Automation is your friend here. You know what they say: out of sight, out of mind. Even 1-2% each pay period deposited over time will grow and serve you in the long run.
  2. Save your tax refund Granted this opportunity only comes once a year and you need to have a refund coming. If you do, have it deposited right into your emergency fund account.
  3. Change, anyone? It can be simple to save all your change. Meg’s grandmother used to empty her coin purse when she came home from shopping into a large mason jar in her kitchen. Today, of course, there’s an app for that. NerdWallet, for example, recommends 3 Money-Saving Apps that make saving painless and simple!

How Do I Make a Habit of Saving for an Emergency Fund?

Get ready to strengthen and flex your saving muscles. Saving is easier if you put some habits into place to help your emergency fund grow.

  1. Set a goal: Be realistic in both time and amount. Even 1% of your paycheck will add up but that takes more time than saving 5%.
  2. Track your progress: There is nothing as fun as seeing your piggy bank growing fatter and fatter. Check in each paycheck to see your progress and then go on to #3. 
  3. Celebrating preset milestones: Something silly like a dance party in the living room for every $500 saved can make the process more fun!
  4. Automate, automate, automate: Review #1 in How to Build an Emergency Fund. This is worth repeating since it works so well and once set up, you don’t have to think about it. 
  5. Be Accountable: Consider financial coaching. Working with a coach will give you more ideas on how to save, how much to save, and where to put your money. But that’s just scratching the surface. Coaching, more importantly, gives you access to the emotional support, accountability, and push that you need to help you take control of your finances and get out of your own way.

 How Do I Know If Something Is An Emergency?

The most important point here is to think and talk about the possible answers to this question AHEAD of time. After all, it is money you have set aside for an emergency so you need to honor that and spend it only when it is necessary. 

Be alert for these traps:

  • A really good, once in a lifetime opportunity
  • Vacations
  • Someone else’s emergency
  • I’m just a little short this month, I’ll replace it next month

Whether you save a little at a time or make a big deposit, an Emergency Fund can keep you from going further into debt, avoid money fights with your spouse, and give you peace of mind.

The most important thing to remember with an Emergency Fund, as with all saving plans, is you have to be intentional about it, set realistic goals, and chip away at them. The systems you put in place will be crucial here: if it isn’t easy, you won’t do it. So keep it simple. 

An emergency fund is a critical component to building wealth but it isn't always easy to implement, especially when you already struggle with building wealth and staying on top of your finances. 

But that’s where the guidance of an Accountable-accredited coach can help! Not only will we assist with the creation of an emergency fund, we’ll do it in a way that aligns with your unique situation and juggle all the other moving parts in your spending plan to ensure that your needs are never compromised in the process.

If you’re ready to take things to the next level, let’s get in touch to see if coaching is right for you with a FREE 30-minute Coach-Match session! This is an easy-breezy no-obligation call where we’ll get to know you and your situation a little bit better. How does it help? It’ll give you a chance to evaluate your current financial scenario, know whether coaching is right for you, and, if you do decide to move forward in the future, this call will help us match you with a coach who is perfect for your specific financial ambitions and challenges!

We’ll find the perfect Financial Coach to analyze your situation and create a plan that’s easy to execute and will have you hitting your goals in no time. Book a call here → 



About the Authors

Parents are stressed because their money is stretched thin and retirement savings are sparse or not there at all. Ron and Meg Knapper know how that feels. They felt embarrassed, even with Ron’s MBA and Meg’s Masters in Education that they didn’t have control of their money. It was frustrating having money slip through their fingers. They changed their mindset, habits and behaviors and are now thriving!

Ron and Meg are passionate about helping other couples avoid the struggle they experienced and instead enjoy the security and confidence they have found. They have both completed coach training and started Knapper Financial Coaching in 2017 to help parents find, keep, and grow their money.

Coaching as a couple provides the strongest opportunity for their clients to be seen, heard, and understood through 1-on-1 coaching, speaking, and workshops. Ron and Meg continue to sharpen their coaching skills by participating and serving in leadership roles with Coach Connections, LLC and the Accountable Network.

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