How to Save an Emergency Fund: A Simple Guide for SAHMs

How to Save an Emergency Fund

Hey Mama,

Have you ever had an unexpected expense come up that you were totally unprepared to deal with? I have and let me tell you, it is NOT fun. In a pinch, I have definitely put hundreds (and on some occasions, thousands) of dollars on credit cards because I had no way to pay for an emergency outright. This is because I didn’t have an emergency fund.
A few years ago, I learned about an emergency fund, and to be honest, it kind of baffled me. Seriously, people just have hundreds of dollars just laying around for a rainy day? Didn’t they have credit card bills and student loans and also want to live their lives? This idea that people weren’t freaking out when their car broke down or they had an unexpected hospital visit just made me feel incompetent. I couldn’t figure out how they had all this extra money to put aside.
Then I realized that they didn’t. Not always. These people worked bit by bit until they saved the amount they needed. And they couldn’t have done so without a budget. Below, I’ll break down exactly how you can start saving your own emergency fund and provide an extra layer of security for your family.

What is an Emergency Fund?

So what is an emergency fund, anyway? Simply put: an emergency fund is a set amount of money set aside that you can easily access when you have an emergency. It has also been called a Rainy Day Fund or an Oh Shit Fund. It is kept separate from your daily expenses but is not tied up in your retirement savings or other investments (we keep ours in a high yield savings account).

Why do Stay at Home Moms Need an Emergency Fund?

An Emergency fund is there so that you don’t have to rely on credit cards or go into debt when life happens. We have all (or known someone who has) gotten a flat tire, had an unexpected dental bill, had to take their dog to the vet because he swallowed a toy, had an unexpected hospitalization, had a tree fall on their house, etc.…
This fund is a reassurance that your life won’t totally derail when the unexpected happens. Although you cannot plan for emergencies or disasters, you CAN save money for an emergency fund to help with them when they do inevitably happen.

This is extra important for stay at home moms because you are (most likely) down to one source of income: your husband’s. That means if he is laid off or gets injured and cannot work, your bills still need to be covered. An emergency fund allows you to continue paying your bills until your husband can get back on his feet or you can find a job in the interim.

What Constitutes an Emergency?

An emergency is NOT:

• Last minute tickets to a Taylor Swift concert
• Buying a new pair of boots because they’re 50% off and you can’t wait for payday.
• Buying Christmas presents because your kid totally deserves them.
• Paying for your sister’s bachelorette party

And the list goes on and on. What the things above have in common is that they are events you can plan for in advance. Paying for these things will not affect your health or safety.

An Emergency IS:

• Paying for a trip to the ER when your kid breaks their arm
• Calling a tow truck and paying for a hotel when your car breaks down out of town
• Paying a plumber because your basement flooded overnight
• Covering your bills because you lost your job unexpectedly

These are all things that you cannot predict, and need to be rectified in order for you and your family to be safe and healthy.

Your emergency fund should not be tapped into to cover things you want, but rather things you need. It can be tempting to use a bit of that money to satisfy a shopping urge or really go all out on a birthday party for your toddler. But you will be so grateful that you had the mindfulness to leave that money alone until you actually need it.

How Much Should Your Emergency Fund be?

The short answer is… it depends. Experts suggest having 3-6 months worth of expenses in your emergency fun. That way, if you lose your job, you can cover your bills long enough to get back on your feet. So how do you determine your expenses? By creating a budget and then breaking it down to the bare minimum. Let’s try an example:

Let’s say your Husband’s after-tax income is $3600 per month.

Your bills are:

• Housing: $1500
• Utilities: $300
• Internet:$75
• Car Note: $285
• Insurance: $105
• Fuel: $150
• Groceries: $600
• Phone Plan: $70
• Student Loans: $280
• Streaming Services: $80
• Gym Dues:$90
• Misc.: $65

Total: $3600

For simplicity’s sake, I had all expenses equal income. If your expenses are more than your income, check out my guide on how to live in one income for more tips.

To save for an emergency fund, you’ll need to extract only what you need to survive. This means your rent, utilities, and grocery budget would stay the same. But you don’t need to pay for Netflix or a gym membership when you’re just trying to survive, right? So you can cross those off the list. You won’t be spending as much on gas if your husband is out of work, so that number can be cut way down. Let’s cut it in half. You can also consider selling the car with a payment if needs must, but let’s keep it for this example. when you take out the non-necessities, your numbers look more like this:

• Housing: $1500
• Utilities: $300
• Internet:$75
• Car Note: $285
• Insurance: $105
• Fuel: $75
• Groceries: $600
• Phone Plan: $70
• Student Loans: $280

Total: $3290

This means that one month’s expenses would be $3290. Three months would be $9870, and Six months would be $19,740.

What Determines How Much You Should Save?

Again, it depends. Ask yourself the following questions:

• Are you simply more comfortable with a larger EF? If so, have six months worth of expenses can better protect your family.
• Is your Spouse’s job volatile or relatively secure? If your spouse lost his job tomorrow, how difficult would it be to secure another job? Is there a lot of volatility in his market?
• Do you own your home or rent?
• Does having a year’s worth of expenses saved make you feel confident?
• Are you relatively healthy or do you need steady income to cover medical expenses?
• Do you have a support network of family or friends that could help if needed?

All of these questions can help you determine what the best fit is for you and your family. For me, I feel most comfortable with a six month emergency fund, but that doesn’t happen overnight for most people. It will take time and dedication to save that much money.

How Do You Save up for an Emergency Fund?

Saving doesn’t have to be complicated. There are several ways to do so:

Make it a Game

You can make saving money more fun by turning your savings into a game. Challenge yourself to put aside a set amount of money in a certain amount of time. Try a savings challenge or make a game out of collecting all the loose change you can find around the house. Roll over any money you spend to the nearest dollar, and keep the change in a jar until it is full.

Automate It

The easiest way to save money is to automate it. Do this by setting up an automatic withdrawal from your checking account to your savings account. You can set it up to withdraw once a month or after each paycheck. Because it comes out automatically, you don’t have to think about it. I like to treat my automatic withdrawals the same as my automatic bill pay. I know which day it comes out each month, so it is already accounted for in our budget each month.

Look For Ways to Cut Back

Review your budget and look for areas that aren’t necessary. Can you cut back on eating out for a few months until your emergency fund is where it needs to be? If you normally shop for new clothes twice a month, try cutting down to one shopping trip every other month and pocket the extra cash. Make frugal meals at home to save on your grocery budget. Try saving money around the house to meet your goals.

Saving for your emergency fund does not have to be all or nothing. Taking small steps will still get you where you are trying to go. Keep in mind that adjusting your lifestyle does not have to last forever. These cutbacks only need to happen until you get your emergency fund securely in place. As a stay at home mom, it can be challenging when you feel like youre not contributing monetarily. By having your emergency fund in place, you can rest easy, Mama.

Have you started to save for an emergency fund? Let me know in the comments below your favorite ways to save!