The Ultimate Guide to Emergency Funds for Moms

Sometimes you try so hard, but if you’re focused on the wrong thing, well, it only leads to disaster. I recently heard the story of a grandma who’d come out to the parking lot after what turned out to be a fateful shopping trip.

Upon arriving at her car, she saw four strangers inside.

Luckly, she wasn’t just somebody’s granny; she was also prepared, and possibly from North Idaho.

Right away, she pulled the gun out of her little old lady handbag and ordered, Get out of my car right this instant.

Startled, they raised their hands above their heads and high tailed it from her vehicle.

Hands shaking, she got inside, only to realize…

It wasn’t her car.

She was so focused on the wrong thing that she missed the one crucial detail that could have transformed the whole situation

It’s the same problem so many families experience when they get thrown off when trying to pay off debt

We’re so intent on getting the bad guys (debt) out of the car, that we miss the one thing that would make everything fall into place so much easier.

If you’ve ever tried to pay off debt but didn’t get the results you hoped for, the missing piece that held you back wasn’t that you weren’t disciplined enough.

Or that you were terrible at budgeting.

Likely, the real issue was that you didn’t start your journey to pay off your debt by establishing a substantial baseline savings fund first.

I know what you’re thinking.

  • “Isn’t $1,000 enough for my emergency fund?”
  • “Our main goal is to pay off our debt, can’t we go ahead and start there?”
  • “It will feel weird to be putting money in savings while watching interest charges rack up on my credit card.”

These are questions I get from clients all the time.

And I get it.

Thinking about saving a significant emergency fund first can feel uncomfortable and overwhelming.

Frankly, the idea of paying off debt is a whole lot more exciting.

But avoiding this step is one of the number one issues holding the moms I work with back in their finances.

And once they learn the right way to approach paying off debt, it opens them up to some amazing success.

But how do you do it?

I get so many questions about this topic from my Budget Breakthrough members, so I’ve decided to give you an exhaustive explanation of my suggestions for emergency funds, specifically for families with children at home.

Inside you’ll find the answers to:

What is an emergency savings fund?

Let’s start with the basics, so we’re all in agreement. An emergency fund is money that you set aside for the express use of emergencies.

Your emergency savings is separate from any other savings you might have for different short-term goals like a vacation, Christmas gifts, or a new car.

It’s that thing you know your supposed to have, but if you’re like most Americans, you don’t have enough of it.

As you sit at your laptop and open your online banking, you might feel a moment of hesitation. Of course, you know you're supposed to have an emergency fund, but as you know, it can be a bit more complicated than that. Let's clear up the misconceptions.
Of course, you know you’re supposed to have an emergency fund, but as you know, it can be a bit more complicated than that. Let’s clear up the misconceptions.

How much should a mom have in savings?

You might have heard the rule of thumb that you should have a three to six-month emergency fund available. Still, that advice probably hasn’t gotten you very far because:

  1. Everyone knows it’s “impossible” to save up that much money
  2. It’s a one-size-fits-all approach that doesn’t work well for most families

So let’s take a look at how much you actually need in savings

First off, you should know that I have two different savings recommendations based on where you’re at in your finances.

Here’s the first.

I’m going to assume that you, like most of the moms in the Affording Motherhood community, want to pay off debt.

If that’s you, your first step is NOT to make extra payments on your loans and credit cards.




About It.

I know it’s counterintuitive, but if you want to be debt free, your best first step is to start by building a One-Month Emergency Fund.

Buzzkill, I know.

No one ever wants to save money.

I mean, it’s not that glamorous. No one writes blog posts trumpeting, Guess what everyone, we fully-funded our emergency savings.

And if they do, they certainly don’t go viral.

No. For some reason, when people do decide to get serious about their finances, the concept of paying off debt is much sexier.

I get it, really, I do.

It’s always the case when I introduce this concept in the Budget Breakthrough program.

No one ever wants to do it.

Which leads me to a lot of arm waving and stomping around after my husband blustering about it.

Wouldn’t $1,000 be enough? they say.

Well, no, it would not.

Then I remember that this is a brand new topic to most of them and that it takes me approximately six years to accept anything unfamiliar, and I pull it together.

We’ll talk in excruciating detail in a minute about why, but for now, just know that if you don’t yet have one month’s take-home income in the bank, that should be the ONE and only financial goal you’re working toward right now.

But what about after that, how many months emergency fund should I have?

Now, we’ll get back to that 3 to 6-month emergency fund idea.

So, let’s say you have expertly established your One-Month Emergency Fund, and now you’re ready to move on.

There are a couple of questions to ask yourself

  1. Are you in the middle of a health crisis?
  2. Are you expecting a baby?
  3. Is job loss a real possibility for you or your spouse within the next six months?

If so, it’s time to keep on saving at least 6 month’s expenses.

Hint: When a recession is imminent, we are all in the midst of a financial crisis, and you should save.

When can I pay off debt?

If you can answer no to all three questions above, then now’s the time to start paying off debt as fast as you can.

Once you’re debt free, you can circle back around and build up your full 3 to 6 month emergency fund.

Is it 3 or 6 months?

Look at it this way.

Every time my kids complain that I make them eat their blueberries or won’t let them jump off their bunk bed, I remind them, As a mom, it’s my job to keep you healthy and safe.

Safe and healthy.

That’s what I want you to remember when you think about managing your money. While someone who’s single or married without kids might be able to get away with a three-month emergency fund, I recommend a full six-month emergency fund for parents with kids at home.

Your children need a roof over their heads and food on the table.

It’s not an option.

They’re counting on you.

Why is it so important to have enough savings?

There are two big reasons to have enough in your baseline emergency fund.

The first is easy to see. Recessions, emergency room visits, job loss…they do happen. We try to ignore it for the most part, and honestly, it’s probably a good thing that we don’t sit around dwelling on the fact that we could be swept away by a disaster at any minute.

The problem is that we tend to forget to plan for these events when everything is going well. You decide to buy the house or go on vacation on that bright sunshiny day in spring, not realizing the long dreary days of winter could lie ahead.

A dear friend of mine recently had a precious baby

She was perfect in every way, and we started calling her the angel baby.

She slept well. Ate well. She was a joy to everyone who saw her.

But then, a couple of weeks after she was born, she got RSV and ended up in the hospital for most of a terrifying week. Praise Jesus, she was ok, but you can imagine the medical bills that piled up.

Now, I’m sure my friend didn’t sit down and plan out, What if my newborn contracts a severe illness and has to go to the hospital?

No one wants to think about that

Nothing like that had ever happened with any of her other babies.

However, she and her husband have been on a long term mission of good financial stewardship. Because they had an emergency fund, they were able to not only cover the medical bills but also get a discount with the hospital for paying with cash.

When you’re in the grip of a major emergency, you do not need the added stress of wondering how you’re going to have to pay for it all. You want to be able to focus all of your energy on caring for your loved ones, not to be worrying about money.

That’s why you need a well-funded savings account.

The first benefit to having an adequate savings fund is it helps you protect your family in an emergency. Plus, it allows you to focus on caring for your family during those tough times without worrying so much about money.
The first benefit to having an adequate savings fund is that you can focus on caring for your family during an emergency without worrying so much about money. Here’s the second…

But there’s another reason why starting with savings is the real first step to paying off debt

Most Americans rely on debt as an emergency fund. When things get rough, they turn to credit cards or home equity loans to get them through.

Besides the fact that repaying those makes bouncing back from a financial emergency all that much harder, it also serves a huge mental block when you’re trying to pay off debt.

Here’s the problem.

When you decide, yes, we will become debt free, it’s an empowering moment. You’re filled with confidence and dream about what life will be like when you’re no longer held back by the weight of debt.

But then reality hits. And life just keeps on happening.

  • The water heater dies
  • Your car needs a new transmission
  • Or your kid breaks their arm

If, at that moment, you have to fall back on debt to cover those expenses, your ego takes a big hit. And for most of us, we start saying some pretty mean things about ourselves and our circumstances.

  • I don’t know why we even try; this always happens.
  • I’m such a failure at money, no wonder we never have any.

And you know what happens then?

Often, we quit.

Not only quit but often we’ll jump on the roller coaster ride of, well, we already failed at paying off debt, so what’s a little more?

The debt continues to grow.

Another year passes.

You look back and realize you’re still stuck in the same financial mess as before.

Instead, here’s what happens when you have your One-Month Emergency Fund to fall back on

It’s quite boring.

That’s what happened with one of my Budget Breakthrough students. Let’s call her Megan.

And in the first few weeks of the program, her oven broke.

It’s not exactly the type of thing you can just let go for a while when you have to feed a family of five every night.

How frustrating must it have been to be working hard on her finances, and then get hit with that?

But because she’d already started building her One-Month Emergency Fund, you know what she did?

She paid the repair bill with cash.

Not only that, but she felt pretty dang good that she was able to cover that unexpected expense.

Here’s what happens when you have enough savings built up

When emergencies happen, you have the cash to cover them.

You rebuild your savings. You continue paying off your debt and move on.

  • No tragedy
  • No drama
  • No debilitating feelings of failure

Then before you know it, you’re dancing around your kitchen in your pajamas to celebrate making your last debt payment. You are free.

Now you know that savings is important to buy the practical things your family needs, but also to help you keep a positive money mindset that can overcome obstacles and keep moving forward no matter what.

But now you wonder…

Where should you keep your savings?

Keep your emergency savings in an account that’s separate from all of your other money. Don’t keep it in your checking. And don’t let it mix in with any other savings goals you might have.

Of course, we’d all love to never have to touch our savings, but as we’ve already discussed, emergencies do happen. The good news is, when you learn to budget the right way, it becomes as rare as a sunshiny day in Seattle.

Next Step Resource: The Best Savings Accounts to Park Your Emergency Fund

When should you use your emergency fund?

Ideally, you should only use your savings for true emergencies. Of those, there are only two:

  1. A job loss, or
  2. A major health emergency.

Of course, the full answer is more nuanced than that, so I’ll plan to do an entire article on that soon.

And now, to tackle the most common objection I get in almost every session of Budget Breakthrough.

Is a $1,000 emergency fund enough?

So, why is everyone so stuck on $1,000?

It’s because Dave Ramsey (who I think is great by the way) recommends that people create a $1,000 “Starter Emergency Fund” before paying off debt.

Unfortunately, though, it doesn’t work out as planned for many families.

This is one area that I don’t agree with his system because I see it hurting so many moms in the Affording Motherhood community.

Good ol’ Dave does have one thing right when it comes to the Starter Emergency Fund, though. Our brain works best when we have bite-sized goals that we’re almost certain we can attain. That’s why the $1,000 savings fund does work for a lot of people.

For instance, my heart fills with dread when I think of trying to tackle my entire pile of papers that I need to file. However, I can be pretty confident that I can get two of those papers tucked into the correct folders. And once I get started, it’s likely that I’ll realize I might just have the will power to do two or three more.

We love easy.

We’re wired for success

And obviously, it’s a whole lot easier to save up $1,000 than it is $4,000 or $10,000 or however much your family typically brings in each month.

The good news is, you don’t have to set a low bar in order to break your goals down into manageable steps. That’s exactly what I help the Budget Breakthrough Mamas do everyday.

And $1,000 simply isn’t enough for the types of emergencies families are likely to face.

When I dig deeper, it isn’t that moms don’t believe a full One-Month Emergency Fund isn’t the best for their family. Instead, I find that this hesitation is coming from a place of fear.

When you’ve tried to budget and pay off debt, only to find yourself right back in the same place year after year, it’s no wonder.

You see, a lot of my clients come to me after they’ve tried the Dave Ramsey thing, and they haven’t gotten the results they hoped.

They’re afraid to try again, especially when I’m asking them to strive for an even more challenging savings goal.

However, more often than not, the smaller $1,000 Starter Fund was one of the things that was holding them back from financial freedom in the first place.

Let me explain

At the start of 2019, I tackled this topic on our Budget Breakthrough Mamas member forum. Everyone, it seemed, was having a tough time wrapping their minds around the idea of saving before paying off debt.

But then, as I explained to them what I’ve already shared above, the light bulbs began to go on.

And the stories began to come out.

Remember Megan, whose oven died in the middle of cooking dinner for her three hungry boys?

Well, she wasn’t always as prepared

She shared,

We’ve been down this road before. One thing I’ve learned in the past is how quickly the $1,000 emergency fund goes away! Last December, we had a leaking axle on our truck, repairs we didn’t anticipate, and it blew the majority of our emergency fund. I wish we could have had a greater cushion to work with.

Another member piped up,

“Last May our furnace and AC died. It was scary how quickly we depleted our savings and then had to use a line of credit, which we are still paying off. After that, we had some huge repairs on our car. Had we had a healthy emergency fund, our situation today would look very different. I am excited about saving up for an adequate emergency fund.”

And then another,

“I’ve kept the $1,000 emergency fund before and have seen it disappear. I had an unexpected A/C repair, and I only had half the cost in my savings. The One-Month Emergency Fund will help protect reaching all the other goals that we desire—paying off debt and staying out of debt. The peace of mind that comes from paying for a large expense out of pocket, it’s a lovely feeling.”

The thread went on and on with women sharing the way that lack of savings, when confronted with unexpected expenses, ended up destroying their dreams of financial freedom.

I know it’s tempting to skip building your emergency fund and go straight to paying down debt, but just as these ladies discovered, it’s worth it to have a nice big cushion to land on.

How long should it take to build your One-Month Emergency Fund?

By now, I hope you’re convinced about how important it is to build up a substantial emergency savings, but it might feel like this is going to take forever. After all, that’s a lot of money.

Despite all that, I would encourage you to take no longer than three months to complete your One-Month Emergency Fund, for two reasons.

  1. First, if you’re without this minimum baseline savings, it’s as if your house is on fire. You need to do something immediately to get your family to safety.
  2. If you draw this out too long, you may lose momentum. You need to get started and experience success right away.

Don’t worry about how for now.

Suspend your disbelief for a moment that this is even possible, and put your goal down on paper.

I’ve found again and again that if you find the courage just to set the goal, you’ll begin to find ways to make it happen.

Here’s just one example from a Budget Breakthrough grad:

“Since joining the program, we have increased our net assets by $13,000 and put $6,000 in savings. We put over $1,000 in savings in the month of March alone! This is so huge because even 6 months ago, I would have said that we barely had $100 to put into savings in a month!”

Jackie M., Budget Breakthrough grad

Want this to be you? Start here…

Even if it feels impossible, don’t let yourself get defeated just yet. Entertain the possibility and imagine what would have to happen for you to accomplish that goal faster.

Rather than saying, Saving up a month’s income is sure to take us a whole year, and we may never get there. Consider asking, How could we get this done within the recommended 3-month time span?

What would you need to do to make it happen?

On the other hand, if you flat out say, It’s not possible. Then you will be 100 percent correct.

It won’t happen.

If you instead open up your mind to the possibility, you will begin to find solutions.

We’ve covered a lot, so let’s summarize.

How do you create a savings fund?

What is an emergency savings fund?

An emergency savings fund is a separate account where you keep savings to be used expressly for emergencies.

How much should I have in savings as a mom?

Moms with kids at home should build a baseline emergency fund equal to one-month’s income. Barring any extenuating circumstances, you can then move onto paying off debt. After you’re debt free, circle back around to build a savings fund equal to a full six months’ worth of expenses.

Why is it so important to have enough savings?

Moms must have enough savings so they can provide the essentials for their children, no matter what emergencies come their way. We don’t like to think about it, but families do get hit with major health expenses and job loss every day, and you need to be ready.

If you’re trying to pay off debt, you also need enough savings in the bank to make sure you don’t fall back into debt after swearing it off. That way, you’ll have the confidence to continue with your financial goals even when emergencies happen.

Is a $1,000 emergency fund enough?

One thousand dollars is not enough for the emergencies most families will face. It wouldn’t cover a major medical bill or car repair and would leave you relying on debt to cover these expenses.

How long should it take to build your One-Month Emergency Fund?

Ideally, you should complete your One-Month Emergency fund within three months. Do it quickly, so you don’t lose momentum.

Your family can’t afford to go without savings in the face of potential emergencies. While it may seem challenging to do it so quickly, try to suspend disbelief.

Set the goal, and you will discover ways to achieve it.

As far as I can tell, the story of the gun-toting granny is the stuff of urban legend.

Yet, it can serve as a valuable warning. Growing your emergency fund can feel weird and uncomfortable at times when all you want to do is pay off debt. But it’s also essential if you want to live debt free long-term. And it’ll never feel as uncomfortable as explaining to the friendly police officer why you high-jacked those guys’ car.

Instead, focus on the one key detail that will transform the whole situation and help you avoid a whole lot of heartache. Start with saving.

Your Next Steps

Right now, open up your online banking and assess how much you have available. Check your average net income for one month. Whatever the difference is, that’s how much you need to save.

Grab a post-it or piece of paper and write down the following:
“I will save $X by .”

Then start looking for ways to make it happen as quickly as possible.

A great place to start is by learning to budget the right way. You can learn a lot from my free budgeting quick-start course. Jump in and get started.

If you’re committed to making dramatic changes in your family’s finances and you haven’t been getting the results you hoped for, you don’t have to go it alone.

I’ve led many overwhelmed moms just like you through amazing financial transformations, and I’d love to support you on this journey. Registration for the Budget Breakthrough program is open now. Inside I’ll guide you through my system for budgeting and paying off debt with bite-sized steps that are manageable in your real life as a mom.

shannon Clark, LIFE & FINANCIAL Coach

As a mom, I know what it's like to feel exhausted, overwhelmed by life, and inadequate to meet my children's needs. But I also know you don't have to stay there.

As an author and coach, I've had the joy of encouraging more than 9.1 million moms to find forward motion with their faith, family, and finances — without the frenzy.

Will you be next?