An emergency fund is the key part of a family’s finances . However, according to Bankrate’s July 2021 Emergency Savings Survey more than half of Americans (or 51 percent) have less than three months’ worth of expenses covered in an emergency fund.
That total includes 1 in 4 Americans (or 25 percent) who indicate having no emergency fund at all — up from 21 percent in 2020, according to Bankrate’s study.
As a single mother, figuring out how much money I need to set aside in an emergency fund, and then saving that amount, has proven to be very fruitful and a foundation of my key money moves as a single mom.

On my Instagram page, one of the main questions I receive have been how to know how much money is appropriate to save. I’ve created a spreadsheet to help get the actual number. The number will vary based on each family’s unique needs. You can find that spreadsheet here, but for now, read on to get more information on all things Emergency Funds.
This article will help you understand what the purpose of an Emergency Fund is, help you evaluate how many months of expenses you’ll need to save, and provide resources to help you figure out your number and save up for it.
First, let’s define what an emergency is and what it is not.
What is an Emergency Fund and why does it matter?
The term Emergency Fund just means a stash of cash that you have saved in a checking, savings account, or even a CD (certificate of deposit) that is easily accessible for emergencies.
That’s the kicker- easily accessible within a day or two.
The reason this matters is because you need access to the funds quickly to pay for the emergency.
For example, you emergency fund can’t be the equity in a house you own, or a car you drive. It can take months to sell a house or a car! If you are incredibly diligent with your money, you may even consider a credit card as your very last resort to spend on emergencies. For today’s purpose, we will consider an emergency fund as cash, though.
What counts as an emergency?
I view an emergency as an unexpected cost that comes suddenly. If you are able to reasonably expect a cost in the future, it is better to consider it as a “sinking fund” item instead.
A Sinking Fund is another term used in the personal finance community to just mean “a stash of cash”. You can also save this in a checking or savings account.
Here is a breakdown to help you think about these expenses.
Types of Unexpected Emergencies that your “Emergency Fund” would be used for: | Types of emergencies that you can plan ahead for and keep in a “Sinking Fund“: |
-Job Loss or reduction in work -Death of a family member that now requires travel -Family emergency -Moving costs -Car emergency -Medical /dental emergency -Pet accident beyond insurance | -Pet Care -Travel -Braces -Down payment on a home -Gifts -Home Maintenance |
The difference for this stash of cash is that it will likely get used up and may not be replenished again.
For example, you could be saving up for braces and once you use that money, you don’t add it back.
A scenario where you would want to add it back are Christmas gifts. You may build up that account, spend it, then build it up for next year. Either way, these expenses aren’t emergencies. You can reasonably expect them to occur so I wouldn’t count them in the emergency fund balance.
When we think of emergencies in this way, we realize that most big expenses are expected expenses and we can budget for them.
If you love visuals check out this Reel I made for my Instagram community:
Is $1,000 enough for emergency fund?
You’ll have to figure out your monthly fixed costs and ongoing expenses, as well as how quickly you can access money to decide how much emergency fund your family needs.
Here are some scenarios to consider and ask yourself:
Question to ask: | Consider 2-3 months worth of expenses if your answer is: | Consider 3-6 months or longer if your answer is: |
Does my family have dual income or relies on a single income? | Dual Income | Single Income |
Do I have kids? | No | Yes |
Are my skills transferable to other jobs? Meaning, can I find a job quickly if needed | Yes | No |
Do I have debt or other monthly obligations that I must pay? | No | Yes |
How much money should you have in an emergency fund?
These 9 questions will help you determine how much you should save. Simply fill out a number for each questions and it will calculate what your emergency fund should be for 1 month up, to one year.
Use this information to:
- Select the right level of Emergency Fund for your family
- Understand how various months would look
- Set goals to fund your desired Emergency Fund
…and set up your family for success!
Tips to save your first $1,000
I recommend you divide the $1,000 into reasonable chunks depending on your income. Some ideas below:
- $25 a week for 40 weeks
- $100 a week for 10 week
- $250 a month for 4 months
- Save the entire $1,000 at once with your tax refund or work bonus
Direct deposit is a great option for this strategy. Here are two other ways:
If you’ve made it this far and loved what you read, please consider supporting me with a cup of coffee 🙂