Sense & Centsibility Blog
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Saving for Emergencies: It’s Financial Self-Care

America Saves Week 2022, February 21–25, is an annual call to action for everyday Americans to commit to saving successfully.

LSS Financial Counseling is among the participating organizations that are encouraging savers nationwide to set a goal for savings and making a plan to maintain or improve financial wellness.

During times of grief, change and instability (hello, global pandemic), it is important to take time for self-care. Mental health self-care is the allocation of TIME for yourself, your health, your well-being. Financial self-care is intentionally putting aside MONEY for YOU, for your financial health and financial well-being. One essential act of financial self-care is saving for emergencies.

Emergency savings prepare you to pay for what comes your way because you have already put aside the money into your savings! The furnace that stopped working during sub-zero temperatures can be covered by money you have saved.

An emergency fund is money you put aside to cover unexpected events. It’s important to have some rules regarding these funds. One major rule is to only use these funds to cover expenses that are both necessary and urgent.

Addressing Challenges and Barriers to Building Savings

Putting aside money in an emergency fund can be challenging. According to the Federal Reserve Survey of Household Economics and Decision Making (SHED), in 2020, 36% of Americans did not have the ability to pay for a $400 emergency expense.

Here are experiences of people I have worked with and ways to save for the unexpected in the face of those challenges.

** I am drowning in debt; any extra money I have goes to pay down my high interest credit cards and loans.

When dealing with debt, it’s important to look at your individual case, because there are many different types of debt and different ways to deal with each, depending on what one can afford and what tools can be utilized.

High debt with late payments on a credit report often goes hand in hand with a low credit score and high interest rates. This combination makes it very difficult to save. While you may not be able to save as much, having a savings goal (no matter how far out of reach it seems) to cover at least one month’s rent or an unanticipated car repair is worth it — especially if your credit cards are maxed out or have late payments on the card that might lead to them being closed by the creditor.

Often, that leaves only desperate means of borrowing credit from predatory pay day lenders, taking out title loans or using cards that can charge exorbitant interest rates and fees. This type of credit is geared towards the consumer whom these lenders know probably will never be able to pay it all back. So they charge as much as possible for as long as they can. Thus, having personal savings is very important, as it can prevent even greater financial challenges.

LSS Financial Counseling is here to assist you! We offer a variety of services to work with you on reducing debt, whether it is from credit cards, student loans, mortgage payments and other expenses that are difficult to manage. We meet you where you are and develop a plan with you that fits your particular situation and type of debt.

** After I pay all my bills, food and transportation costs, there is no money left.

Prioritize what to pay first and see if there are additional resources to help pay for other expenses. If you are receiving government assistance for various programs, there are asset caps. Most are capped at $2,000, though, which still is a huge amount for people living paycheck to paycheck. It may be a long-term goal to eventually be able to build savings, but even just depositing $25 per month into a savings account makes a difference. For some, starting to save may have to wait until a tax refund is received, but whatever the approach, it is worth prioritizing savings.

A useful approach to build savings is looking at all your expenses with a fine-tooth comb and finding the “leaks” where the money is escaping. Discovering and naming those “leaks” and tracking them help curb or change spending behaviors altogether and free up room to build an emergency savings fund.

An LSS financial counselor can review your budget and credit report and work with you on strategies that free up funds.

** I have been thrown into a new state of chaos, and my financial life is too overwhelming to comprehend. (The sources of this stress can range from divorce, unemployment, addiction recovery, new health issues, a new addition to the family, death of a partner, living on your own for the first time, or an abusive domestic relationship.)

Tragically, 10 million Americans experience domestic violence per year. Financial abuse occurs in 99% of domestic violence cases and is the top reason for staying or returning to an abusive partner, according to the National Network to End Domestic Violence. Getting support is crucial. If you are in a violent domestic relationship, if you are a survivor of domestic violence, or if you are from a family of generational domestic violence, call the National Domestic Violence Hotline at 800.799.7233 for support.

Financial self-care is essential when experiencing, leaving or avoiding an abusive relationship. When you have extra money, PAY YOURSELF FIRST; you earned it. Think long and hard about spending on items that will make you feel more accepted by your partner, more beautiful, or more worthy. You are enough as just you! If you are giving your money to people who you believe need it more than you, think about whether this is really the case. You are worth it, too!

Know that you have a right to open your own account. The Equal Credit Opportunity Act from 1974 says that women can open bank accounts in all 50 states without a male cosigner. Also, in 2021 the Consumer Financial Protection Bureau clarified that discrimination by lenders on the basis of sexual orientation and gender identity is illegal.

Ways to Jump Start Savings

  • A tax refund is a great way to start a savings account.
  • Sell stuff. Get rid of things you don’t need, and turn them into savings.
  • Change a spending habit. Put cash into envelopes each month for what you will allow yourself to spend on your “changed habit” (coffee, gas station snacks, eating out, groceries only with a list, etc.); then only use what is in the envelope each month. When the cash is gone, you stop spending in that category. With the amount saved, open a savings account. If the curbed spending goal is sustainable, make the monthly savings deposits automatic, and watch your savings grow!
  • If you have kids, grandkids, nieces, nephews or chosen family, you can be a role model for them. Let them see you discuss finances at the kitchen table and deposit money into savings. You can even open a savings account for kids with as little as $10. They can get used to spending some money, putting some money away and acquiring a learned skill at a young age.

Whatever the reason, getting trustworthy support is key to financial self-care. Our certified, experienced and nonjudgmental financial counselors are here to support you! Call for 888.577.2227 to schedule a phone or virtual appointment, or get your support online.

Sarah Jannusch


Author Sarah Jannusch is a Certified Financial Counselor for LSS Financial Counseling.