Episode 5: Emergency Funds — How Much You Really Need and Where to Keep Them

Last year, Hurricane Helene turned my life upside down. My home and office were under water. Floors, kitchen, furniture—everything was destroyed. Insurance payments crawled in at a snail’s pace. FEMA offered no real help. For months, I was forced to live hours away while rebuilding my life and my practice.

And yet, despite the chaos and expense, I wasn’t financially ruined.The reason? I had an emergency fund.

In the latest episode of the LawyerFI Podcast, I share my personal story and break down what an emergency fund really is, how much you should save, where to keep it, and whether you even need one at all. Whether you’re a lawyer, business owner, or simply someone who wants financial peace of mind, this is a conversation you don’t want to miss.

Why an Emergency Fund Matters

An emergency fund is more than just a savings account—it’s a safety net. It keeps you afloat when life throws curveballs like job loss, unexpected medical bills, or, in my case, a natural disaster. It allows you to make smart, stress-free decisions without being forced to rely on high-interest debt or prematurely cashing out investments.

When Hurricane Helene hit, my emergency fund gave me the breathing room to pay for temporary housing, repairs, and daily expenses without panic. It turned a potentially devastating financial disaster into a manageable—though still difficult—life event.

What Counts as a Real Emergency

Not every surprise expense qualifies as a true emergency. In the episode, we talk about the difference between needs and wants:

• Emergencies: job loss, major car repairs, medical bills, home repairs after a storm.

• Not Emergencies: vacations, holiday gifts, upgrading your phone, or a last-minute concert ticket.

  
  

Drawing these lines in advance helps you use your emergency fund wisely and keep it intact for when you truly need it.

How Much Should You Save?

How big should your emergency fund be? There’s no one-size-fits-all answer, but here are common benchmarks:

• Starter Fund: $1,000 to cover small emergencies while paying down debt.

• 3 to 6 Months of Expenses: The classic recommendation for most households.

• 6 to 12 Months: Ideal for business owners, freelancers, or anyone with unpredictable income.

  
  

The key is to start where you are. Even small, consistent contributions can add up quickly.

Building Your Fund Faster

In the podcast, I share strategies to supercharge your savings:

• Automate transfers from checking to savings each payday.

• Use windfalls—bonuses, tax refunds, or side hustle income—to give your fund a boost.

• Temporarily cut back on non-essential spending to jumpstart your balance.

  
  

Where to Keep Your Money

Safety and accessibility are crucial. High-yield savings accounts, cash management accounts, and money market funds are great options. They keep your money liquid and earning interest while staying separate from your day-to-day spending.

Some of the tools and resources we discuss include:

• Empower App for budgeting and tracking cash flow.

• Clark Howard’s list of the best high-yield savings accounts.

• Vanguard Cash Plus Account and Fidelity Cash Management Account for secure, interest-bearing storage.

  
  

Do You Really Need an Emergency Fund?

Some financial experts argue that credit cards, investments, or lines of credit can replace an emergency fund. In the episode, we tackle this debate head-on and weigh the pros and cons of each approach.

Your future self will thank you for starting today. Listen to the full episode of the LawyerFI Podcast to hear my story, learn practical strategies, and start building your own financial safety net.

🎧 Click here to listen now or subscribe wherever you get your podcasts.

And if you’ve experienced your own financial wake-up call—or if you have a unique strategy for handling emergencies—share your thoughts in the comments. Your story might inspire someone else to finally take the first step.

Sponsored byThis episode is brought to you by Family Diplomacy: A Collaborative Law Firm, serving professionals across Florida with dignity and privacy in divorce. Learn more at www.familydiplomacy.com or call 813-443-0615 to schedule a confidential virtual planning meeting.