Market Briefs Newsletter

Subscribe to our FREE finance & business newsletter to get financial news you can finally use.

Thanks for signing up to Market Briefs! Please check your email to confirm your subscription. If you don't see the email in an hour, check your spam and promotions folder. 

Be sure to read our Privacy Policy & Terms of Use.

  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Minority Mindset

Minority Mindset

Defy all odds.

  • Home
  • About
  • Blog
    • WEALTH
    • REAL ESTATE
    • STOCKS
    • SAVINGS
  • PRODUCTS
  • MONEY 101
  • GUAC TALK
Advertiser Disclosure

Our promise to you.

Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

See more from Wealth

How To Start An Emergency Fund And Prepare For The Unexpected

June 13, 2021 by Brenna Major

Brenna Major Writer At Minority Mindset
Brenna Major June 13, 2021

How to Prepare for an Emergency

Disclaimer

We only endorse products that we truly believe in. Some of the links below may earn us some extra guac at no additional cost to you. Please pass the chips & thank you for feeding our habit.

Having an emergency fund can be the difference between a blip on the radar and a complete financial meltdown. Unexpected situations and emergencies simply cannot be avoided – c’est la vie! But an emergency fund will definitely cushion the blow and give you space to think rationally instead of panic.

An emergency fund is a savings account specifically saved to cover unexpected expenses that happen in life – maybe your water heater goes out, or you have a flat tire. Regardless of the reason – this fund is precisely the portion of your savings to cover these.

The first step towards financial health is creating an emergency fund.

Wealth ManagerMinimum InvestmentLink
$0Sign Up
$100Sign Up

What Is An Emergency Fund?

An emergency fund is money set aside in case of, you guessed it, an emergency.

You are not to touch this money unless it’s an emergency. And no, Bloomingdales having a huge door buster’s sale is not an emergency. Sorry.

So What Is An Emergency?

The emergency fund is meant to be used for unexpected expenses only.

Things like a trip to the emergency room that your insurance won’t cover or an unexpected car repair are good reasons to dip into your emergency fund.

Also, it’s good to have an emergency fund in case you lose your job or your business. Even if you find a new job relatively quickly, having no income at all can be a huge burden.

What Is Not An Emergency?

OMG did you hear about the new shoes that Nike just released? They’re so cool and they’re only available for a limited time!

Yeah, that’s not an emergency. In no way is your wellbeing or livelihood is affected if you don’t get those shoes.

The holidays can be an expensive time of year. Wouldn’t it be great to dip into that emergency fund for some extra gifts? No.

That’s not an emergency either. Holidays come at the same time every year.

This also goes for your property taxes, your water bill, and your regular car maintenance.

These kinds of expenses should be already accounted for in your budget.

Featured Partners

$0 Fees | $100 Minimum

Invest Here

$0 Fees | $0 Minimum

Invest Here

$0 Fees | $1 Minimum

Invest Here

How To Start An Emergency Fund

Did you know that 61% of Americans do not have the funds to cover a $1,000 emergency? Are you one of them?

Let’s change that today and start an emergency fund. Like with any goal, building an emergency fund can be broken down into smaller steps so it’s not overwhelming.

If you had to eat an elephant, how would you do it? One bite at a time – right? The same applies here.

1. Save The First $1,000 ASAP

There are essentially three ways to build an emergency fund:

  • make more money
  • spend less money
  • or do both.

You can make extra money in a variety of different ways.

Pick up a side hustle: drive for Uber, rent your place on Airbnb for a few weekends, get a part-time retail or bartending gig. There’s an endless pool of possibilities!

Or if you’re bolder, you can start a business or start investing.

If you already work as many hours as you can, then you’ll have to cut back on spending. 

We all know what the usual suspects are when it comes to overspending; food and fun.

The average American spends 10% – 15% of their income in restaurants.

So cutting back things like going out to dinner and meeting friends for drinks will help you reach your first $1,000 quickly.

Cutting small expenses can add up too.

For example, stop buying snacks and drinks when you get gas, don’t buy coffee on your way to work every morning, and bring your lunch rather than buying it.

2. Save The Rest Of Your Emergency Fund

The reason the first $1,000 is the hardest is because you might not be used to working more and/or spending less.

But once you get started, you see that it’s not so bad. In fact, research shows that it takes 90 days to build a habit.

Are you watching TV and playing video games in your free time? Side hustling is better for your wallet and your state of mind. It gets you out of the house and into the world.

And living like you’re in an emergency situation when you aren’t will prove to you that you can do it. If you did lose your job, you already know that you can live on less.

What you want to remember is, just because you have money in your bank account doesn’t mean you have to spend it! Living below your means is essential to building a strong emergency fund.

We have a comprehensive guide on how to save money that can help you reach your goal faster.

How Much Should An Emergency Fund Be

Your emergency fund should be big enough to cover six months of essential expenses.

We know, take a deep breath. It sounds like a lot.

But note the word “essential.”

In a financial emergency, you can eliminate expenses like gym memberships, Netflix subscriptions, and eating out. We’re actually talking six months’ worth of essential expenses like housing, utilities, food, and car payments.

Why SO much?

The average cost of an ER visit without insurance or before the insurance will kick in varies between $150 and $3,000. If you require surgery, that number can go into five or even six figures.

Similarly, the average car repair bill is between $500-600.

Some financial experts only recommend saving for three months of expenses so why are we telling you six?

Because it could take months to find a new job if you lost your current one. And it’s always better to be over-prepared than under-prepared for whatever life throws at you.

If you’re living paycheck to paycheck, any of these emergencies could put you in debt for months or even years. That’s why six months is the platinum standard for an emergency fund.

Save With CIT Bank*

Where To Keep Your Emergency Savings Fund

Your emergency fund needs to be somewhere that is both safe and immediately accessible. It won’t be safely stuffed under the proverbial mattress so don’t even think about it.

This is when your bank account becomes very useful. Create a separate account for your emergency fund.

It’s important to have a separate account because, remember, your emergency fund is money that you do not touch unless it is an emergency.

If you’ve been reading our other articles and watching our videos on YouTube, you might be a bit confused because you’re losing value in the bank due to inflation.

While that is true, ease of access is more important than the growth of your emergency fund.

Preparing For An Emergency With A Savings Fund – Final Thoughts

Building an emergency fund takes time and sacrifice, but anything worthwhile does.

An emergency fund is a solid foundation beneath all of your personal finance goals.

Once you’ve done it, you’ll understand that the peace of mind it gives you makes that sacrifice worth it.

PlatformPromotionsLink
Get a cash bonus of $30-$500 Sign Up
Get one free stock priced up to $225 Sign Up
Get up to $1,000 after funding a new accountSign Up
Get a free slice of stock worth up to $300Sign Up

*FDIC Insured. Conditions Apply.

Brenna Major Writer At Minority Mindset

Written by Brenna Major.

Brenna is a marketing guru who enjoys running, coffee, and a good game of Mario Kart! She works mainly in digital marketing, and dabbles in some design work and project management on the side.

Primary Sidebar

Advertiser Disclosure

Our promise to you.

Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

More From Wealth

  • 13 Ways To Save Money When You're Broke
  • Robinhood Scandal - Should You Still Use Robinhood?
  • Creating Generational Wealth - 9 Ways To Get Started
  • How To Save When Money Is Tight

Get Your FREE Guide To Building Wealth

& our daily newsletter

Thanks for signing up for our financial education emails! Check your email to confirm your subscription. If you don't see the email in an hour, check your spam and promotions folder.

Be sure to read our Privacy Policy & Terms of Use.

Featured Wealth Posts

Robinhood Scandal

Robinhood Scandal - Should You Still Use Robinhood?

Creating Generational Wealth

Creating Generational Wealth - 9 Ways To Get Started

how to save when money is tight

How To Save When Money Is Tight

What Are Appreciating Assets

What Are Appreciating Assets?

The Latest On Wealth

mom with child thinking about her savings

13 Ways To Save Money When You're Broke

REITs VS Real Estate Mutual Funds

REITs VS Real Estate Mutual Funds - Which Is Better?

Roth IRA Conversion

What is a Roth IRA Conversion and Why Would You Need One?

Stock Market Investing Accounts

Best Stock Market Investing Accounts For 2022

M1 Finance Roth IRA Review – Is It Good for 2022?

Kraken Crypto Review 2022 - Why You Should Use Kraken

Binance Review

Binance.US Review 2022: A Trusted, Beginner-Friendly Option?

M1 Finance Review

The Ultimate M1 Finance Review - Great For Experienced Investors

Fundrise Passive Income

Can You Use Fundrise to Generate Passive Income?

How To Start Investing With $100 Per Month

Footer

Keep Hustlin’

Company

  • About Us
  • Store

Help

  • Contact Us
  • Advertise
  • YouTube

Legal

  • Privacy Policy
  • GDPR Opt-Out
  • Comment Policy
  • Terms of Use

Follow us on:

Disclaimer: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements, and seek independent professional advice, before making any financial decisions. Our content is provided for informational purposes only, and no content that is provided or included in our products or services is intended for trading or investing purposes. We will not be liable for the accuracy, usefulness, or availability of any information transmitted and/or made available by way of our products or services, and shall not be responsible or liable for any trading and/or investment decisions made by you based on any such information. For a further understanding of this Disclaimer and use of our site, please see the information contained in our Terms of Use and Advertising Disclaimer.

Minority Mindset may earn a portion of sales from products that are purchased or recommended through our site as part of our Affiliate Partnership with retailers and brands.

Minority Mindset has partnered with CardRatings for our coverage of credit card products. Minority Mindset and CardRatings may receive a commission from card issuers.

© 2023 Minority Mindset, LLC. All Rights Reserved.
Website managed by Stallion Cognitive™