Building an emergency fund when you’re a couple is hard but when you’re a single mother it’s seems nearly impossible. The fact that you must juggle multiple life problems daily doesn’t make matters easy. Paying your bills on time, paying for things for your kid (s) or just trying to keep your head above water; may make an emergency fund seem impossible to build.
Note that I said seems impossible. It’s not that hard if you build it in parts. I found that when thought of saving 3 to 6 months of my essential income, it was very overwhelming. Consequently, once I looked at it in part (small goal thresholds that I can build on) it became much more doable. You might think that you don’t need an emergency fund but you certainly do! It is especially relevant as a single parent if you lose your job, get sick or god forbids your child gets sick; How will you live? With an emergency fund, you will never have to worry about those possibilities.
Therefore, this is how to build an emergency fund with little effort on your part.
List your expenses
List the expense you’d have to keep paying even if your income disappeared due to job lost, Healthiness…etc. Think rent or mortgage payments, food, medical costs, insurance, child-care, car payments, gas. These are your essential expenses.
Go over it
Go back over your list and cut out anything you’ve kept that’s not essential. If you have no income at all, you can suspend your cable, telephone, entertainment and everything else that falls into the “wants” category. Remember you won’t need child care if you’re not working.
What’s your totals?
Now write in the monthly amount you typically spend for each of your essential emergency expenses. Then put six check boxes beside the amount.
Pick the first expense you want to have covered. Be it shelter or food or car payment. Ten dollars? $25? $100. In addition, open a savings account where they’ll pay you a decent rate of interest. Hence, have the amount you’ve designated automatically deducted from your regular account to your Emergency Fund account every month.
If you can’t find that $25 to save cut back. Do you buy coffee every day on the way to work? Calculate how much you’re spending, cut it in half, and save the difference. Buy your lunch? Another, do you have McDonald once a week cut it out. Find that $25 even if it’s just twice per month.
Finally, once you’ve got a month’s worth of rent covered, put a check-mark in one of your boxes. As a result, you now have 1 month’s worth of shelter money at the ready. Keep going, you’re on your way to building a great emergency fund!
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