It is not okay that you (or we, a collective we) do not have an emergency savings fund. And yes, I know what you’re going to say because I used to say it too: It’s hard enough just trying to get by paycheck to paycheck. You’re not making nearly as much as you should be. How can I even talk to you about savings when you have bills piling up in your mailbox?
But I stand firm. Even if all those things are true, you still need to be putting something, anything, away into that savings account. Why? Because you will miss that money now a whole lot less than you will wish you had it when you need it. And you will need it. Unexpected expenses may be, well, unexpected, but they’re not uncommon. Broken appliances, car repairs, medical problems, job layoffs — every one of us is likely to experience at least one of these as an adult.
In the recession that started in 2009, women alone lost more than 2.1 millions jobs. By 2010, nearly one in 10 people was unemployed. Why then, do we operate under this assumption that our paycheck (regardless of how small and how it’ll never be enough) will keep appearing in our bank account, or mailbox, until we take another (better!) job?
At dinner with my friends the other night, we were talking about emergency funds and someone asked innocently what the “proper” amount really is. When I said we should all have anywhere from three to six months of our monthly expenses saved up, almost every single woman at the table balked. It was as if I had just said we all need to start stockpiling gold bars. And these are women who are all gainfully employed — dedicated, ambitious creatures, leaning in, climbing up, tap-tapping away at glass ceilings. They all looked at me and pleaded with their eyes: But that’s impossible.
Even in the most dire of circumstances, we can usually find an extra dollar to give to a hungry, homeless person. Even when we’re just scraping by, we can usually find a way to justify splurging on a birthday present for a friend or a take-out meal for ourselves.
What if we all stopped thinking how impossible it is to save an emergency fund and just started doing it?
What if you stopped reading this article right now and counted all the cash in your wallet and transferred that same amount from your checking account to your savings account? Would it really hurt that much? Would you immediately feel the loss of that $30 or $50 or even $100 that you just moved?
And what if you made it even easier? What if you set up an automatic transfer of a small amount, any amount you think you wouldn’t notice ($20, $40, $50?), to be transferred directly to your savings account from your checking account every week? Twenty dollars is what you would have spent on happy hour drinks last Thursday. It’s three lunches you don’t buy during the week and instead bring from home. It’s just twenty freaking dollars!
Slowly, what seemed like a blurry goal far out in the distance will start to come into focus. What at first seemed ridiculously impossible now seems somehow ridiculously easy because you’re not even thinking about it. And slowly you realize you can up that doesn’t-hurt-amount from $20 to $40, and you still don’t feel it. How far up can you keep pushing?
Do it until you’re just on the side of starting to feel it and before you know it you’re maximizing your savings and what started as zero is piling into a nice looking sum. One hundred per week turns into $5,200 at the end of the year. And $5,200 in five years? $26,000 just like that.
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