It doesn’t take much to feel off-balance financially.
A change in your job.
A sudden expense.
A shift in your household or relationships.
These moments often come without warning, and they’re happening to more people than you might think. But what’s reassuring is this: there are ways to prepare, even if things aren’t perfect right now.
In this Money Hacks video, the focus is on the quiet financial move that helps people feel more grounded, regardless of what life throws their way. It’s not about getting everything “right,” but about having a small buffer that lets you breathe easier when things don’t go as planned.
If you’ve ever felt unsure about where to start with your finances or how to feel a bit more in control, this is worth a watch.
Have any money questions you’d like answered? Our Money Hacks series is built on conversations we have with employees, investors, savers, and anyone planning for their financial future. What topics are on your mind for our next episode?
Video Transcript:
Hey, this is Alex Assaley. It’s episode number 128 of Money Hacks.
In today’s session, I want to talk about a recurring theme we’re seeing during our one-on-one coaching sessions. As a retirement-focused advisory firm, we regularly meet with organizations and their employees to offer guidance across the entire spectrum of personal finance.
Lately, many of the questions we’re getting revolve around savings especially emergency savings. People are wondering how they can keep building their savings during uncertain times. Maybe the markets aren’t doing well. Maybe there’s concern about the economy. Or maybe someone is going through a job transition, a layoff, or experiencing reduced income.
We’re also having conversations with people navigating other life changes like combining finances with a partner, or going through a separation. Even things like having a roommate move out and taking on a larger share of rent can throw off someone’s financial balance. In all of these cases, one thing becomes clear: having emergency savings in place is crucial.
The foundation is simple, build up a cushion so that if something unexpected happens, you have enough money set aside to cover your essential living expenses.
So, what are the best ways to do that? First and foremost: automate it.
We often talk about a “bucket strategy” for managing your financial life. One of those buckets is your emergency or short-term savings. Ideally, you’re contributing to that bucket automatically — every paycheck or every month — without having to think about it.
The best way to do this is through direct deposit. Have a portion of your paycheck go straight into a separate account that’s designated for emergencies. It’s out of sight, it’s consistent, and it becomes a habit. Second: create separation.
We’re big fans of high-yield savings accounts. Your emergency fund should be in a place where it earns interest, has no fees, no penalties, and no minimums but is also separate from your daily checking account. That separation helps reduce the temptation to dip into it for non-emergencies and keeps your savings visually and mentally distinct.
Now, what happens when you actually need to use it?
Sometimes people ask, “Should I really dip into my emergency savings?” And the answer is yes. That’s what it’s for. Whether it’s a major car repair, a job transition, or a reduction in force, this fund is meant to help you through that moment.
Ideally, your emergency savings will cover 3 to 6 months of essential expenses. If you need to use part of it and it drops to two or even one month’s worth, that’s okay. Once your situation stabilizes, you can start rebuilding.
At the end of the day, emergency savings is one of the core building blocks of financial wellness. It gives you breathing room when life happens and it always will.
We have more content on our site about this topic, including how to think about emergency savings in the context of your larger financial strategy. Thanks for joining us. See you next time.
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