Do you really need an emergency fund? 3 important considerations

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Having any sort of savings feels like a great accomplishment. It is no secret that it is harder now than ever to live comfortably. The odds forever feel against us, whether that be when buying a house, taking out insurance, or saving. Having an emergency fund is widely advised by financial professionals and advisors. It acts as a safety net for the unexpected. You may have seen somewhere or another that you need 3-6 months of income saved for your emergency fund. Doesn’t that sound great? If you are lucky enough to be in a position to have an emergency fund like this, you may not be using it correctly.

I’ve heard from many that they seem to never be able to keep their hard-earned cash in their fund, it constantly is disappearing, meaning you have to start all over again to build it up.
Financial management shouldn’t be that hard! However, don’t beat yourself up over it. We aren’t taught this stuff and if we are it’s a rigid, one size fits all solution. Together we’ll look at some of the reasons that I think focusing on having an emergency fund and the way you may be using it, could hinder your future goals.

Are you Using Your Emergency Fund Correctly? 

What is an emergency fund? It may sound like an obvious question and you might even be asking yourself, “DUH, Sarah. We know.” I do think it is important to get back to basics with this. I’ve seen savings being used incorrectly which has led to frustration and bewilderment as to why it wasn’t working the way they expected. 

Your emergency fund is for situations such as losing your income stream(s) and you need to ensure that your lifestyle is maintained and things can run as normal as possible. It isn’t for anything else! It isn’t for the surprise car repair expenses. Does an unexpected car repair sound like an emergency situation that needs immediate attention? Yes, absolutely. However, the thing is, you should already be saving and setting aside money for those things that are separate from your emergency fund. This is where the issue lies.

So many people can’t seem to keep money in their fund because they are using it for non-emergencies and things that should have been budgeted for separately. Here are some examples of other non-emergency fund expenses that you should be budgeting for: 

  • Insurance 
  • House repairs 
  • Vet expenses 
  • Medical expenses
  • Unexpected travel 
  • Natural disasters

We can feel that we have great control over our finances. However, we will never achieve financial freedom or security if we don’t ensure that we’re allocating funds in the right way.

Using Your Emergency Fund for Everything Won’t Get You Ahead

Using your emergency fund for everything is a form of self-sabotage. You are setting yourself up for failure and disappointment. Having a strong and positive mindset around your finances is one of the keys to success. How can you have that when you’re feeling overwhelmed and discouraged all the time? Your emergency fund is dwindling for the third time that year, only to need filling once again. You will never have the opportunity to feel ahead. 

As humans, we crave rewards. It keeps us motivated and driven towards our goals. When we see no fruit of our labor or proof in our pudding, we can become so discouraged that our likelihood of quitting is high and chances of succeeding are low. 

You may be thinking that you simply don’t have enough income to ration out among so many different funds and saving categories. Start small! The most important thing is to progress and put one foot in front of the other, rather than being stuck in the present or falling behind.

You Can’t Strategically Know Your Expenses 

By lumping everything into one category, you’re hindering your ability to understand each and every expense that you may encounter in an annual year. This may sound arduous and even monotonous but it’s VITAL. You need to know them all. When you have a savings plan for every single known and unknown expense separated from your emergency savings fund, you plan for the future in a way that frees up money that you don’t need and ultimately keeps only what you do need. 

Life is full of surprises and unpredictable events. However, we still have the control over how we plan for them. 

This to me is what real financial freedom looks like. The ability to endure and remain unruffled by life. The true meaning of having a Bulletproof Budget.

Getting Started

Let’s get you started in the right direction. It’s all about taking it slow and at a pace that feels right for you. Don’t compare yourself to what others have. This is your journey. Here are the three tips I recommend to gaining control of an emergency fund:

  1. Establish every expense: make a list of every single expense that you might encounter throughout the year. There is no expense too small to be added to this list. Each is important and will contribute to your ability to see your true financial situation 
  2. Budget for them: create a budget that includes these expenses. You can use a spreadsheet or App
  3. Start your emergency fund: now that you have that organized, you can figure out how much you can contribute to your emergency fund. Remember, a little is better than nothing. Just get the ball rolling! 

If you’ve read this far, I know you are serious about making some great changes to your life. I also appreciate how difficult and daunting it can feel to make these changes, especially if you’ve been trying so many different strategies with little or no results. 

I’ve created the Bulletproof for Life Program that has been specially designed for you. How do I know that? Because I WAS you. I’ve been through it all so you’ll know you’re getting not only a mentor but a confidant and cheerleader. 

Are you looking for more financial resources and advice? I have tons of blog posts on the Bulletproof Blog plus loads more resources on my website!

I’m Sarah


On a mission to change the world of finance from stuffy suits and guilt-trips to a place of understanding supported by solid strategy; I have personally journeyed from homeless teen mom to ass-kicking CEO and now my work centers around empowering women like you to do the same.

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