Women and Money – Starting an Emergency Fund
Treat your mind like money, don’t waste it.
– Sophia Amoruso is an American businesswoman. At age 22, she started an online eBay store selling vintage clothing and other items, which she named “Nasty Gal Vintage”. In 2016, she was named one of the richest self-made women in the world by Forbes.
Your emergency fund is the foundation block to longer term savings. This fund should be used as a safety blanket to cover unexpected expenses or generate income in the event of job loss or sickness; it also offers that peace of mind and sense of control. Knowing that in the event of the unexpected you are not going to be caught unawares.
You may now have been able to identify the amount you can comfortably put away each month into a savings account. So your next step is to find an account.
I would look for a flexible account offering the ability to increase or reduce your monthly contribution and also allowing you to access the account without penalty should you need to. This may be available with your current bank account or you may (and I would advise this) wish to look for an alternative provider to keep your savings totally separate – the temptation to “dip in” is reduced this way!
Once you have found the account;
- Set up a standing order
- Review the amount regularly (you may have months where you can afford to put away more and some where your expenses are higher)
- Keep motivated
You should aim for an emergency fund of between 3 and 6 months income. It may take some time to build this up but keep going! You are building a fund you didn’t have before and taking your own steps towards financial freedom.
For more information the Money Advice Service also has some useful tips on how to set your savings goal here.