Resist By Putting on Your Own Oxygen Mask First
The Emergency Fund Episode
It seems like all my favorite personal finance content creators are talking about emergency funds lately, from Chris at Heavy Metal Money to the folks at Women’s Personal Finance.
And why not? It sure feels like a time that the stuff could hit the fan.
I’ve written a few posts about being prepared for household emergencies and even the need for a go-bag. But I’ve been remiss in writing about emergency money!
You can probably imagine why you need an emergency fund — job loss, unexpected home or car repairs, or any number of infinite rainy day problems. Not only does your emergency fund give you a buffer against the inevitable, BUT it also gives the middle finger to the oligarchs. Every time you don’t have to use a credit card, an oligarch loses his wings.
So, let’s kickstart this thing!
First, open a separate bank account. I recommend finding an FDIC-insured high yield savings account online so you can earn a higher interest rate. You’ll be able to get your money in 3-5 days and float with a credit card in the meantime. (Pay it off ASAP, don’t give the oligarchs any extra money!) But if you want access to your cash right away, open a savings account at the bank where you have a checking account. You should be able to transfer instantly.
Next, figure out how much you need. We’ve been tracking expenses, right? Figure out what your bare-bones, no-fun household expenses are and shoot for one month of that number. Once you have that amount as a foundation, gradually build your fund to 3-6 months of expenses.
If that’s too daunting at first, start with a goal of a thousand bucks. (It’s what Dave Ramsey recommends, not that we like him…)
Finally, get that money!
“From where, Jessie?”
If you’re starting from zero, examine your expenses. Is there anything you can cut? Start slashing, then set up a biweekly or monthly auto-transfer for the amount you’ve saved.
Perhaps there really is nothing you can cut — a spot many people are finding themselves in these days. In that case, look for services that can assist in reducing your expenses — such as no-barrier food pantries, diaper banks, and library offerings — and bank the savings. It might feel strange to “get help,” but this will keep you from digging a deeper hole the next time your car breaks down, etc. (Side note: I read in Poverty, By America that two-thirds of people who are eligible for government assistance do not receive it. Probably because of cumbersome applications and long wait lists, but it’s something to think about.)
Save your windfalls, or at least a portion of them. Helloooo, tax refund… Getting a few thousand bucks of your own money back from the government is a great opportunity to establish your emergency fund.
Start hustling with some A-List and B-List side hustles, discussed in the post below. I’m not trying to “glorify hustle culture,” but as the headline reads…
Sometimes, the answer is more money.
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If you’re facing a financial obstacle, your first inclination — and the advice from plenty of gurus — will be to review your budget. Cut some subscriptions. Clip some coupons. And that’s not necessarily a bad idea. Heck, I sell a budget template on Ko-fi.
I realize an emergency fund is a privilege. But if you don’t have one, please make it your prerogative to GET THIS PRIVILEGE. Don’t procrastinate! Prioritize yourself, not what the oligarchs tell you that you can’t live without. Because with President Elon and The Red Hat piloting this plane (ahem), you’ll want your oxygen mask ready to go.
This morning I was grateful to attend NerdCampCT, where I got to talk with fellow educators and authors about reading, writing, and books! In the opening remarks, an organizer shared a quote from Calling In: How To Start Making Change With Those You’d Rather Cancel by Loretta J. Ross:
“Fighting hate should be fun.”
That struck me because so much of what’s in the news right now makes me feel sad and powerless. As much as I get involved locally and attempt to focus on my own circle of control, it’s hard not to get bogged down.
But one week from today, I will NOT be bogged down! Instead, some friends and I will be sharing songs and snacks to raise money for an amazing community venue and other worthy causes that are under attack. Connecticut friends, join us!
What are you doing these days to avoid getting bogged down? What are you doing to put on your own oxygen mask?
Talk to you soon,
Jessie
To learn more about budgeting, band finances, and other personal finance topics, order Money Hacks for Metalheads and Old Millennials: The Revised and Expanded Second Edition in paperback and ebook formats: https://amzn.to/3AjB1j6
Free stock photo by Aman Jha: https://www.pexels.com/photo/receipt-folded-into-paper-plane-on-grass-707191/
Love this! WE have 6 months stashed away, and save $350/month toward emergency savings. Sometimes actual emergencies set us back (I was under employed last summer), but because of this fund I only have $21 in credit card debt (from this morning, to get points. I'll pay it tonight).