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Emergency Savings Accounts

The most crucial accounts you can have as a mom is emergency savings accounts. 

What is your biggest worry as a parent?

For me, it’s definitely our AC running out. 

I live in the American South, where the hottest summer days can get above 100 degrees F and humidity can be over 70%, resulting in a heat index of like 120 degrees F. 

Days like that kill people. 

They say money can’t make you happy. Still, I know that not worrying about my AC breaking during July or August would make being happier easier. Read this if you think you suck at money.

What is an Emergency Savings Account?

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An emergency savings account is different from a traditional savings account. 

A traditional saving account is for long-term goals like retirement, buying a home, or starting a business. 

An emergency account is precisely what it sounds like: a savings account reserved strictly for emergencies, like if your car breaks down or someone needs sudden dental work. 

The easiest way to save is to set up a direct deposit from each check. Set it and forget it. It will grow with no effort! 

Wondering where you are going to get money for this account? Click here to find out!

Does saving money for an emergency seem beyond your ability? Click here to join my Facebook Group for moral support!

Pyschological Benefits of Emergency Savings Accounts

Understanding how our minds work can make a big difference in our budgets.

Our instincts are to gorge ourselves after a long period without food. This is called the scarcity mindset. And it depletes our capacity for self-control.

The same is true of money. When we are always worried about money, constantly making one financial-trade off for another, we suffer in other areas of our lives.

It can create depression, anxiety issues, and affect you physically increasing your chances of diabetes and heart disease.

Having an emergency savings account will help you pull yourself out of that scarcity mindset, helping you to lower stress levels, focus on your priorities, and make progress in your financial and private life.

How much should you put away?

This is a question that can only be answered by you!

Dave Ramsey suggests putting away 6 months’ worth of expenses in case of things like job loss. Still, I think that figure is deflating for people who are struggling or just starting on this journey. 

I think a goal of $1,000 is a good place for most moms to start. It’s enough to relieve the stress associated with more minor emergencies. 

Once you reach that goal, then you pick your next goal and keep going. 

Where to keep your emergency savings account? 

Never keep large quantities in cash. First, because if you lose it or are robbed, it’s gone. Second, it will not appreciate. 

Savings accounts earn tiny amounts of interest. 

Your hope is to hold this account for a long time. Its balance may go up and down, but use it as a way to pull in some passive income, no matter how slight. 


You can open a savings account at a bank. A lot of people choose this option.

You can link it to your checking account as overdraft protection. 

Most banks are insured by the FDIC, which protects your money against theft. Ask a representative to make sure your account is covered. 

However, the interest rate is meager, like less than 1% of your balance per year. 

They will probably have monthly fees, a minimum balance, or transaction fees.

The easy accessibility can make it more tempting to pull out money when you shouldn’t.  

Online Savings Account (These are the SECRET to DOUBLING your return!)

Online Accounts are available at many brick-and-mortar institutions and many strictly online companies. 

This means that you can visit a local branch at some, but the online banks may not have a branch you can visit. 

Many companies will issue you a debit card to access funds. 

If you don’t have access to a debit card, transactions can take a few days to process. 

Online savings account interest rates are much higher than traditional banks. They can be as high as 2.15%. 2.15% is more than double the return on a banked-based savings account.

Some will have no fees, while others will have only minimal costs. 

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Credit Unions and Emergency Savings Accounts

A credit union is like a bank, but it runs as a not-for-profit. Banks are for-profit institutions. 

Credit Unions aren’t open to everyone. You have to qualify. In my area, there is a credit union available to anyone who lives in my state. Marine Federal Credit Union is an institution that caters to the members of the armed forces. 

This means they usually have fewer fees and special programs to help you save for different things. So they are a great place for emergency savings accounts.

They may also do credit counseling or home loan education programs. 

Want to hear more about credit unions? You should! Leave me a comment below.

 PS: Join my Facebook group and meet other moms taking control of their money!

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