Stay Ready – Emergency Fund or Emergency Plan

I was going along, checking my LinkedIn profile when I came across advice regarding the age old question – where to keep an emergency fund. An emergency fund in personal finance land is to make sure you have enough money stored safely in the case of an emergency. The typical suggestion is 3 – 6 months of expenses.

The certified financial planner made the argument that cash money sitting in a savings account is a waste because you’re losing the value of money to inflation.


I was an adult with a mortgage when the recession of 2008 hit. Certain pieces of financial advice make me itchy and that is one of them. There is no way one piece of advice would work for everyone because everyone’s circumstances is different. And circumstances change. For example, the me of today has more resources than the me of three years ago.

Instead of an Emergency Fund, consider drawing up an Emergency Plan that you review on a regular basis. This idea was born of my Furlough Plan. When I was furloughed for one too many times, I drew up a Furlough Plan because I knew that I would be too upset in the moment of getting a furlough notice to think rationally. So I made all the decisions ahead of time to answer the question – If I was out of work for an unspecified amount of time what would I do?

In order to formulate my plan, I conducted an analysis of my current situation. Ever hear of a SWOT analysis? Strengths, Weaknesses, Opportunities and Threats. Here are some of the questions I asked:

1. How did you get your last job? And how long did it take from the time you submitted your resume to the time you received your first paycheck?

This seems like a simple question, but it can really say a lot. Basically, this tells you where you are in your career. Are you at the point where your network is serving you up opportunities or are you in the building phase where you have to apply for every job, submit for every publication or are you somewhere in between? If you have to go through a slush pile – be it submitting a resume for a position or a story to a publication – that’s a weakness. What is something that you can do now to shore up your network?

2. What is your emergency budget?

Will you need to budget higher costs for health care? Will your commuting or grooming expenses decrease? It’s easy to say that you won’t go out as much, but is cutting the eating out budget to the bone reasonable?

3. How will you bring money in?

Do you know the process for filing unemployment? One thing I learned is that applying for unemployment is a process…a process that takes time. It took a month from the time that I applied for unemployment to the time the funds were in my account. I would have never known that. Let’s say that unemployment would have covered my expenses, I still would have needed a month of expenses somewhere easily accessible.

Research how much you’re eligible to receive for unemployment. You don’t have to guess. This information is online for your area.

Do you have anything in your possession that you can easily sell on eBay for some quick cash?

What are your sources of income?

If you’re thinking of joining the gig economy as a stop gap measure, it may be worth it to try it out now to see if you would really like it. Everything has a learning curve. Best to do it now when you’re not stressed out.

4. How will you reduce expenses?

What will it take to break your lease if you are a renter? That fee needs to go as part of your emergency budget. Can you move in with someone? Can you take in a boarder? How is your pantry looking? In times of inflation, one of the best places you can put your money is in non-perishables. Do you know what a good price is for what you buy?

What subscription service (or two) gets canceled?

If you have debt, can it be renegotiated? Can your payments be put on hold?

5. What’s your emergency schedule?

This is the one I added because here is where I made my mistake. Draft a schedule of what you will do with your time. We all say that we would do BLAH if we were laid off or furloughed, but it’s too easy to let that time slip away. Get a new routine. Your new job is getting a job and keeping your financial house afloat.

6. How will you treat yourself?

You know what’s good about having all that time? It’s possible you can take advantage of some free arts events in your area. Life still goes on. And it’s fun trying to see how much you could do for the least amount of money. Look up what’s going on in your local community or rec center.

7. Write this up.

It won’t be perfect. It will need to be revised. But it’s a good start.

Once you’ve answered these questions, now you have a better idea of how much you need in your emergency fund and what you can do today to shore up your resources.

Copyright © 2022 Irette Y. Patterson

About Irette Y Patterson

Irette Y Patterson is a writer of fantasy, science fiction, and romance. She has been published in FIYAH, Strange Horizons, Translunar Travelers Lounge and on the website of The Saturday Evening Post. When not writing, you can find her digging around in her garden or catching the latest musical in the theater.
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