The $2,000 difference

As a financial counselor, people often ask me how much they should have in their emergency funds. I tell them something unhelpful: “I can’t answer that question for you.”

Some people feel comfortable with one month of expenses saved while others feel comfortable with three, six, nine or even 12. If you’re feeling good about your job security (does anyone right now?) maybe one month is enough. If you know it took you four months to find a role the last time you looked, maybe six would be a more comfortable number.

So once they land on a number of months that feels good, we take an honest look at their monthly expenses, add a buffer and multiply by their desired number of months of savings to come up with their unique goal. This isn’t foolproof, but it’s a start.

Emergency savings aren’t the only kind of liquid savings I encourage them to pay attention to, though.

Homeowners need to maintain extra savings to cover inevitable repairs.

If they’re sole proprietors, I tell them it’s smart to create a separate savings account exclusively for taxes and put a portion of each payout into it so they’re not caught off guard come April. It can also be helpful for them to have yet another savings account to hold a business runway that can help bridge expenses during slower seasons or for a month when they want to take a break.

In YNAB parlance, things like home repairs, tax savings and a business runway are called “true expenses”, not “emergencies.” An emergency is something you can’t predict happening. But paying taxes, needing to take your car to the mechanic if you own a car, splurging on Christmas if you know you’re the type and building a sabbatical fund if you’re planning to rage-quit your job soon are future realities that you just need to start setting aside money for now if you’re able to.1

In addition to my emergency fund, I have three high-yield savings accounts for different future “realities.” I share the last one with my husband:

• Taxes

• Business runway/maternity leave (I happen to be pregnant!)

• Future fund (car down payment, baby supplies, inevitable out-of-pocket medical expenses etc.)

It helps me to have different buckets of savings rather than keeping them all in one amorphous blob of an account because doing so adds clarity and accountability to my situation. I know that I can’t be tempted to use one bucket of savings to cover something like a vacation if it already has the “job” of paying for taxes or another savings goal. It also relieves the guilt of actually parting with those savings when it comes time. Those dollars are just going on to fulfill their purpose.

It’s not like there’s anything wrong with using loans to cover home repairs or other big expenses. But the point of liquid savings is to be your own 0% interest creditor when the alternative is going into high-interest debt.

At minimum I recommend that W2 clients have two high-yield savings accounts:

• One that exclusively holds their emergency fund

• One that’s “dippable” for things like vacations, semi-annual expenses like insurance premiums or car repairs and other shorter-term savings.

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If this feels overwhelming, I feel you. This is, in part, the business of building a safety net in the absence of a social safety net. We don’t have an economy that makes layoffs feel like an aberration, especially if you’re a Black woman. In the States we don’t have paid parental leave or universal healthcare that would save us thousands of dollars (at minimum, it’s about $2,500 with insurance just to deliver a baby) or affordable universal childcare (unless you live in a place like New Mexico or Vermont).

But here’s a study that I hope makes the project of building savings more encouraging while we wait for politicians to come along who actually care about the economic pressures facing middle class Americans. It comes from Vanguard:

“Vanguard researchers surveyed more than 12,400 Vanguard investors in July 2024 to understand the impact of emergency savings on financial well-being. The study, the results of which are summarized in The Relationship Between Emergency Savings, Financial Well-Being, and Financial Stress (2025), found that emergency savings are the strongest predictor of financial well-being. The impact of having at least $2,000 in emergency savings is remarkable: Those who have set this amount aside report a 21% increase in financial well-being, and having at least three to six months of expenses saved is linked to an additional 13% increase in financial well-being, even after accounting for income, debt type, and financial assets.” - Vanguard, Emergency savings may hold key to financial well-being

Just $2,000 set aside for emergencies makes a huge difference for people (if that doesn’t seem like much, 43% of Americans wouldn’t be able to cover a $1,000 emergency with cash). Getting to that 3-6 month mark feels even better.

Depending on your unique emergency fund “number” that fully fleshed out fund could take time to build. But taking care of our future selves — even up to $2,000 — has a calming effect on our nervous systems and allows for people to save for other goals.

If you don’t have an emergency fund, getting to $2,000 by the end of the calendar year would require about $8 of savings every day, about $57 a week and $250 a month. Does that feel doable? Could you automate those transfers into a dedicated emergency fund?

If you do have an emergency fund, do you want it to be bigger? What would it take to reach your next goal and how might you reward yourself for hitting that goal?

If you’re satisfied with your emergency fund, what are the “true expenses”/future realities in your life that would be smart to begin saving for now?

• “People who lose jobs with six months of savings and no debt find new jobs and move on. People who lose jobs with two weeks of savings and a mortgage payment due in twelve days start a countdown to bankruptcy that is almost impossible to interrupt.” - David Reinherz, “I worked on many bankruptcy files since 1998. Here’s what destroyed these people”

• Money Anxiety Isn't Your Fault — But It Is Your Problem - Berna Explains It All and HeyBerna

• How Much Does it Cost to Get Pregnant? - Ally Jane Ayers, Money Changes Everything

• “Bartering with my neighbors literally saved my life this month” - r/povertyfinance

• This was a really lovely example of how shopping your closet can feel as satisfying as buying new outfits (I mean, it helps to have a stylist curating new outfit combos for you, but it was still inspiring!)

• If you need a mother’s day gift idea

• “What you have you lose, what you are you don’t lose.” -Ram Dass

• I have a limited number of financial coaching slots left in spring and summer 2026 before heading on maternity leave (and I’ll never have more flexibility over my schedule than I do now!). If you’d like help understanding your unique money story and be equipped with the infrastructure to build a sustainable, aligned budget, I’d love to meet with you for a free 30 minute intro session. Here’s a fresh review from a client in her 50s!:

  What would you tell a friend about the program?

  “Working with Bethel has been so beneficial. She’s a kind, thoughtful, and compassionate listener whose unique approach helped me understand my emotional connection to my finances. She helped me let go of a bit of shame I had about not being very financially-savvy despite being on the cusp of 60. Through delving into my experiences with and feelings about money, I was able to become less self-judgmental. By focusing on what really matters to me in this world and showing me a straightforward process to care for my finances, she helped me to find a real sense of freedom in the tending.“
  

  Do you believe the program is a good value? Why or why not?

  “A wholehearted yes! I was able to spread payments out over the 3 month duration, which made it manageable, and now I feel I’m living in alignment with my intentions.”
  

  —Linsey