Why Should Creating an Emergency Fund Be a Top Priority?

1. The amount will vary

The amount of money you place in your emergency fund will differ for each family. My husband and I sat down and decided how much we wanted to put in our emergency fund, and the way we calculated this was we were pretty much a one-income household.

I did work, but it was part-time and would differ weekly. It was sporadic, so we decided how much to put in our emergency fund because we wanted six months' worth of income in it. That means six months of being able to live off that money.

2. A lower budget

It wouldn't necessarily be the lifestyle we may live right now, but it would be a much more restricted lifestyle. It would be the bare minimum. It would pay for our mortgage, pay for our bills, pay for our food, and shop for all of the essentials.

Of course, the emergency fund isn't just for if we lose a job, it's for if things break unexpectedly and need repairs, which can be costly.

If you are in a household with two full-time incomes, then you might decide that three months of income would be enough for you or

even one month because you know that if one person loses their job, the other still brings in an income.

3. Figuring out what you need

To begin with, if you can get a $500 emergency fund, it means that if something does happen that you would typically put on credit

cards, you can then use that emergency fund to prevent more debt from happening. It gives you security. You're calculating your emergency fund.

Figure out how much per month you need for your mortgage or rent, your bills, and any debt.

4. How to save

You might be thinking, well, that's all well and good, but how do I save for an emergency fund month to month? We are only just about getting by it as it is. Here are my tips on how to get an emergency fund and how we accumulate our emergency funds.

Getting the money you want in your emergency fund can be slow. It did take us four years. Building up an emergency fund for someone with a lot of expendable cash is going to be a lot easier than for someone who doesn't.

You can save up for an emergency fund first to go through your bills, go through how much you are spending on everything, and then look at anything that you can change, cancel, or reduce. We went through our spending and saw where we could reign back.

During this time, you need to pay for all the essentials, but if you can walk to work for a bit rather than driving, save that money on fuel. If you can cut back your food shopping bills to half, save that. If you spend loads of money going shopping or going out for dinner, quit going out to eat. All of these little things do add up.

​​5. Extra income

I got a job to help have the money for the emergency fund. My son was about three months old, and I contacted the local pub. I started to work there, and pretty much every single thing, every single penny that I earned, went to the emergency fund.

You have to remember that when creating an emergency fund, it's not as simple as saving up and then having your emergency fund. Emergencies and things come up, which means you have less money to save or take money out because emergencies will happen.

The way to create your emergency fund is for a short period to get an extra job. If you're working Monday to Friday, nine till five, get a job in the evenings. There are so many ways that you can get extra income coming in.

If you're able to do that and you know it's just for a short amount of time, you can focus and say, for six months, I'm going to work hard doing 70 hours a week, but at the end of it, I'm going to have an emergency fund. I would encourage you to do that.

That is how we managed to get our emergency fund. It was hard work. However, I can see the fruits of my labor four years later. I have a six-month emergency fund that helps remove that stress if anything arises; I know we can handle it.

Another way you can also earn a bit of money is to sell things around your house that you do not need. If you can sell a few things, if you got clothes you don't wear, if you can declutter things that you don't want and earn money from them, then that can go into your emergency fund as well.

The important thing about deciding to do your emergency fund is to go through your budget and figure out what can change.

6. Adapting to a frugal lifestyle

You might realize that living this life has helped you realize you don't need much of the stuff you thought you did just once. You can start living a more frugal life and realize that financial freedom helps your mental stability.

Taking that materialism away really helps my mental state, I found. People from the outside might look at our life and think we are boring, but I don't see it like that. I see it as we are really content and really happy.

We don't have to live for the next holiday; we don't have to live for the next big thing. We enjoy the small stuff. The joy of living a frugal life is it gives you freedom.

Why should creating an emergency fund be a top priority?

I hope I have helped you understand why creating an emergency fund should be a top priority and inspired you to create an emergency fund. What are your plans to get started on an emergency fund? Share your frugal money-saving tips in the comments below.