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The EF Word!



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Yes, you know what I’m referring to. An Emergency Fund isn’t just something financial advisers talk about for the fun of it. Everyone, and I mean everyone needs an emergency fund. We never know what expense may occur from one day to the next, so it is important that if something major happens, we are ready for it. Maybe you need an expensive car repair or possibly an unanticipated medical emergency pops up, you have to be prepared. You don’t want to wait until it happens to figure out what to do.

During the housing bubble, I was laid off from my job not once, but twice. Luckily, my parents own a second home in South Florida – which they rarely visit – so I was able to move in until I got back on my feet, but not everyone is that lucky. I had less than $1,000 in my bank account and no income in sight, besides unemployment.

From that point forward, I swore I would never put myself in that situation again. Once I found employment, I began building my emergency fund. Now, based on who you speak to, the amount in the fund may vary. There are many factors that one needs to weigh out when determining what constitutes a sufficient emergency fund.

The first items I’d like to talk about are your expenses and lifestyle. This will drastically dictate how much you need to save. If you currently have a mortgage that runs $2,000/month, your emergency fund needs to be a lot larger than say someone who has a lower cost of living. You also need to take into account the size of your household. The larger your family, the larger your emergency fund needs to be.

I currently rent a two-bedroom apartment near downtown Indianapolis which runs $1075/month plus utilities. In total, with all expenses including internet, groceries, Netflix, etc., I am looking at about $1,500/month. While most finance gurus suggest a 3-month emergency fund, I tend to err on the side of caution and give myself a bit more cushion. In my mind, 5 or 6 months is a better option. So, in my case, I am looking at a $9,000 emergency fund. This may seem like a lot at first, but you need to build it little by little. Take a small portion of each paycheck and dedicate it to this fund. Before you know it, you’ll have enough saved up to combat any challenges life throws at you.

Joey Amato is the publisher of Frugayity, a personal finance advice website geared towards helping the LGBTQ community live a more frugal life and save for the future. Amato has been in LGBTQ media for over a decade, having published his own lifestyle magazine UNITE in Nashville and Indianapolis. He is also the publisher of Pride Journeys, a syndicated LGBTQ travel column and website. For more information, visit

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january 2022