GRWM

GRWM + Let’s talk emergency funds!

Life happens. You can rest easy at night knowing you’ll be okay in those life happens moments.

If this kind of financial security sounds like a fairy tale that’s too good to be true, you’ve got to believe me: It. Is. Possible!

Let’s talk about how much to save for an emergency fund. That answer depends on a few things.

Starter emergency fund: If you have consumer debt, you need a starter emergency fund of $1,000. This might not seem like a lot, but it’s just a temporary buffer while you pay off that debt.

Fully funded emergency fund: Once that debt’s gone, you need a fully funded emergency fund of 3–6 months of expenses.

How much should you save? Start by taking a look at your bank account to see what you usually spend each month. Then multiply that number by three or six to get an idea of how much you should save for your emergency fund.

How do you know if it’s really time to tap into your emergency fund?

First off, can you simply adjust your budget this month to cover the expense? Skipping some extras for a few weeks to avoid dipping into savings is totally worth it. Because remember, once you spend from the emergency fund, you have to rebuild the emergency fund!

If moving things around in this month’s budget won’t cut it, simply ask yourself these three questions:

1. Is it unexpected?
2. Is it necessary?
3. Is it urgent?

If you can answer yes to all three of those, you’ve got a real emergency—and a real need to use your emergency fund.

We’ll cover what to put in your sinking fund next week, so make sure you follow to check it out ✨

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