Why I Keep More Than 6 Months’ Salary in My Emergency Fund

Learn how this mom protected herself after a run of bad luck.

It was a rainy fall day when I received a call from my son’s school.

“Your son has had an accident. You need to meet him at the hospital,” they said. The ambulance was already en route.

Flustered, I rushed from work. In hindsight, I now realize I should not have driven. Manhattan’s midday traffic is horrible even in the best of conditions, but the rain made it a nightmare. I should’ve known better, but I wasn’t thinking clearly.

Read More: Here’s Why 44% of Americans Tap Their Retirement Savings Early

To make matters worse, I was rear-ended on the way to the hospital. Unfortunately, the other driver sped off, and I was unable to get their insurance information.

I recall laughing and crying from the absurdity of what was happening. I was also hoping against hope that the idiom about bad luck coming in threes would pass me by. It didn’t. A few days later, a dentist informed me that I had cracked not one, but two of my molars and the oral surgeon said they could not be saved. I was going to lose them.

The Aftermath

Physically, we survived. My son suffered a herniated disc and received physical therapy. I lost two teeth and now have implants in their place. My car was eventually repaired. However, financially, those three incidents happening back to back almost crushed me.

As a single mom, I’ve always been frugal. When all of this happened, I had more than six months in my emergency savings. I thought I was financially prepared for any surprise that could pop-up; I just didn’t expect three to happen all within the same week.

More on Emergency Savings: 39 Ways to Save for Your Emergency Fund

Being the sole provider of my household taught me how to hustle. I fell back on those skills to ensure I didn’t ruin my credit and jeopardize my long-term savings goals. Below are a few of the steps I took to safeguard my finances.

I Hustled Smart

I believe in hard work. I also believe in smart work. This means I put my skills to work for me. As a social media and content consultant, I offered a discount to clients who elected to work on retainer. Not only did this help me pay down some of my family’s medical and dental bills, but it also set a precedent. I now have steady clients on retainer.

I Applied for a Healthcare Credit Card

Credit can help you reach your savings goals when used strategically. The healthcare credit card I applied for gave customers the option of paying their bill at a later date — in my case, within a year. The interest was high (26.99 percent) if you missed the deadline, so to ensure I paid it off within the year, I broke down the charge into 12 equal, more manageable installments.

I Created a Barter System

I believe the barter system is an overlooked and underused commodity. It’s a simple and effective system that everyone can use. You may already be using it now without realizing it. If you’ve ever traded school pick-ups days, asked someone to pet-sit in exchange for dinner, swapped books with friends, then you are bartering. You’re exchanging one item for another.

How did I use this system to help me pay down debt? I swapped skills. I dyed friends’ hair in exchange for manicures and pedicures I usually would have paid for. Similarly, I offered my social media expertise to small businesses in my area in exchange for things like dinners and printing services.

Do You Know? How Much You Should Have Saved in an Emergency Fund

The Takeaway

So, why did I have more than six months’ salary in my emergency fund and why do I continue to make that my standard? Because emergencies happen when you least expect them. It could be an injury, it could be a job loss, it could be a combination of things. Regardless, having a significant amount of savings for these emergencies can save you.

Remember, bad luck might (or might not) happen in threes, but financial stability always happens when you plan for the unexpected.

Read More: My Husband Fell Out a Window and It Wiped Out Our Savings

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