Extra Sunshine and Emergency Funds

July 11, 2022

Picture this: It’s a sunny day and you’re on your porch enjoying nature. There’s a light breeze and the temperature is just right--not too hot, not too cold, and no stuffy humidity or allergies to be found. You’re engrossed in a good book, enjoying the scenery and the soundtrack of the birds, or watching your kids play together without a single squabble. Glorious, right?

Those *just right* moments are such a gift.

Now imagine you’re in the middle of enjoying your once-a-year perfect afternoon when you walk back in the house to reapply your sunscreen (safety first!). You notice it’s a little warmer than usual, so you check the thermostat. Surprisingly, the temperature reads 5 degrees higher than what it’s set to and it’s not even the hottest part of the day yet! In that moment, what do you do?

  1. Reapply your sunscreen, find the number for the HVAC company, and head back outside to give them a call for service.
  2. You don’t have the money for this.

For a significant amount of people, option 2 is the response. According to a survey[1] conducted by Bankrate.com in July of 2021, nearly 25% of Americans have no emergency savings and another 26% have less than three months’ expenses saved in an emergency fund. That means that 51% of those surveyed would have difficulty covering this unanticipated expense.

It’s not too late to make some changes so that you can choose option A. A typical emergency fund consists of 3 to 6 months’ worth of expenses. It’s calculated on the expenses that you would still need to pay even without any income. This would be your rent/mortgage, utilities, groceries, etc. It may seem like an emergency fund means you’re living in fear or thinking pessimistically. Both are valid concerns; however, an emergency fund is just another tool to provide peace when, should the worst-case scenario happen, you’re prepared.

Below is a worksheet to help you think through how much you should save/want to save in your emergency fund. There is a spreadsheet version as well as a PDF version that you can print and complete by hand, whichever you prefer.

Emergency Fund Worksheet - Excel Version

Emergency Fund Worksheet - PDF Version

Remember: This is your EMERGENCY fund. Once the money goes in, it doesn’t come out until there’s an actual emergency. (Ice cream, an upgraded phone, or a fancier couch don’t qualify.)


If you’d like to get some additional budgeting help or just aren’t sure where to start, reach out to me at nicole@raderandrader.com. We can see if the budget coaching we offer is a good fit for you!

[1] https://www.bankrate.com/banking/savings/emergency-savings-survey-july-2021/