Action Item: Open a high-yield savings account this week and transfer your emergency fund into it, or get started with just $100 today to build momentum.

Summary:

In this episode, I break down everything you need to know about emergency funds without the overwhelming advice that leaves you paralyzed. I share why 54% of Americans don't have enough saved for three months of expenses and how you can break out of that statistic starting today. I walk through the exact process my wife and I used to set up our emergency fund, including which banks to use, how much to actually save (spoiler: it's probably less than you think with a barebones budget), and most importantly, when you should actually use your emergency fund. I also tackle the big question nobody answers: should you invest your emergency fund or keep it in savings?

Resources & Links Mentioned:

Fidelity article on emergency fund guidelines: https://www.fidelity.com/viewpoints/personal-finance/save-for-an-emergency

Goldman Sachs three-question framework for using emergency funds: https://www.marcus.com/us/en/resources/saving/when-to-use-an-emergency-fund

Bankrate emergency savings statistics: https://www.bankrate.com/banking/savings/emergency-savings-report/

Free Emergency Fund Planning Guide: Email me to request

Timestamps:

[01:28] The problem: 24% of Americans have zero emergency savings

[03:16] How to save: Start with $1,000, then build to 3-6 months of expenses

[04:40] Should you invest your emergency fund? Why the answer is no

[05:14] Mental reframe: Think of your emergency fund as a debt you owe yourself

[06:04] The three key questions to decide if you should use your emergency fund

[08:00] Real-world scenario: Imagine making $60k with no emergency fund

[09:29] My implementation process: How my wife and I set up our emergency fund

[11:00] The shortcut to calculate your emergency fund amount without perfect tracking

[12:00] Automation is key: Set up direct deposit straight into your high-yield savings

[13:28] How to actually spend your emergency fund when the time comes

[14:41] My favorite thing: Emergency funds cut your emergencies in half

Email me at fpyapod@gmail.com