Singles Need Larger Emergency Funds

by Kevin on August 29, 2011

We live in financially difficult times. Unemployment has been consistently high for months. Even with Congressional extension of unemployment benefits, many families are running out of unemployment before they can find a job. We know emergency funds are important, but exactly how much of an emergency fund do I need? Does the situation change if you are single?

Emergency Fund for Singles

While couples or families undoubtedly have higher expenses under one roof, they typically have two incomes that share the burden of providing for the family. Many pundits say families should have 6 to 12 months of expenses saved up. What many do not realize is if you are single (or a single income family), you are more vulnerable to disaster and disability than a two income family. If you are married your spouse is either already working (which slows down how quickly you draw dowm your emergency fund because you have some income coming in) or they could go back to work. For these situations your emergency fund may be larger than you think because your income is unlikely to drop 100%.

That is not the case for singles. If your income disappears, you have no one else to rely on but yourself or whatever assistance you can scrounge up.

Typical Emergency Fund Standards

Most financial gurus say you should have 3 to 6 months of your monthly expenses saved up for emergencies. They also said familes should have a minimum of 6 months of expenses saved up. That doesn’t seem like nearly enough money available to handle a crisis. All it takes is one emergency like a car repair followed up by getting laid off to really put you in a financial predicament.

After the financial crisis, housing bust, and rampant unemployment I believe a larger emergency fund is warranted… especially for singles. You should have at least 6 months of expenses saved up; preferably 9 to 12 months. (How many people do you know that have been unemployed for at least that long?)

The Impact of a Large Emergency Fund

If you are single then impact of having a large emergency fund cannot be underestimated.

More independence. By increasing your financial stability you are also increasing your independence. No more need to use the credit card to cover your bills during rough times. No more calls to Mom and Dad. No more borrowing money from your roommate.

More attractive. Let’s be honest. Having your finances under control is a sign of maturity and makes you more attractive as a potential spouse.

Better employee. Who is the boss going to promote to run the next big project: the one who handled a car repair emergency in stride last week or the one that missed 2 days of work and complains loudly of never having any money?

Less stressed. Money is one of life’s biggest stressors. Having money in the bank to fall back on should help relieve some of that burden.

Start Building Your Emergency Fund Today

If your expenses are $1,800 per month, having a 6 month emergency fund means you need to have $10,800 saved up. When you are just starting to get your finances in order, that can seem like an insurmountable amount of money. You might just netting $100 in free cash flow every month, and it would take you a while to save up a full fund.

So set small goals. Build your fund to $500 first, then $1,000, then $3,000. It will take time as you pay down your debt, but the end result will put you in a more secure financial position. And you should be able to sleep better at night.


Golfing Girl August 30, 2011 at 9:34 am

I continue to struggle with what the “right” amount is to have in our emergency fund, and what could be counted in accessible funds. Right now, I’m being ultra conservative and using our average spending to calculate how many months we have. We’re married, but I’m now a stay at home mom. Even though that means we’ve only got one income, I think we’re still at less risk that singles because if my husband lost his job, I’m definitely employable if he can’t find something, so we have double the chance of getting work faster.

I also struggle with whether or not to count our Roth contributions in our amount saved. I don’t currently include it, but if our regular emergency savings ran dry, I’d definitely tap into it.

Kevin August 30, 2011 at 8:49 pm

I would agree you are at less risk because of having two potential wage earners. Even if you had to go back to work and your wages were low, that’s better than nothing (or having no one else to rely on to earn income).

I wouldn’t count Roth savings… that’s a “break the glass in case of emergency” moment, not something that you would readily tap into.

Golfing Girl August 30, 2011 at 9:35 am

P.S. I’m still annoyed that your full post doesn’t show up in my e-mail anymore (like all the other blogs I subscribe to). That’s why I haven’t been posting much–you have to REALLY catch my attention in that short snippet in my inbox to get me to the webiste.

Danielle May 31, 2012 at 3:55 pm

I think nine months is a great goal! Three to six months is sufficient in a better economy, but with today’s situation in mind, anywhere from at least 6-12 months is a safer choice. For more information on emergency savings, check out

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