by Harvey Harman 2019

Our son and his wife were recently near the epicenter of a major earthquake just outside of Anchorage, Alaska.   They were fortunate.  While they had to replace many of their possessions that were broken by the quake, their house had no major irreparable damage.   But it easily could have been much worse.   

In the fall of 2018  North Carolina, where I live, had two major hurricanes, and thousands of homes here have needed to be completely gutted and rebuilt, or abandoned altogether.    

Personally, I have gone through times where I was not  well prepared for an unexpected emergency.   Certainly when our children were young and we were trying to juggle multiple priorities on a limited budget, I had weeks where my regular prayer was “Dear God, help me get through today.   Help me get through today.”   Sometimes that was as far into the future as I could have clear focus.     

When the housing downturn (I am a Green Builder and Conservation-based Developer) happened in 2008 and my work came to an abrupt standstill (no money coming in but bills still needing to be paid) I said a prayer of thankfulness every time I could pay an outstanding bill.  And we made it through that time one step at a time.   Fortunately,  I have a very supportive family. 

And my story is really the story of so many people in America today.   Most of us do not have a well developed support system,  our government safety system is not in good shape and is not  something we can count on,  friends may or may not be there when we need them, and we can often feel very isolated and alone in our challenges and struggles.    

My story demonstrates what many Americans are dealing with.   It costs a lot to cover basic needs in America in 2019 .   If we are self employed and impacted by a downturn or change in the economy, or laid off because of a change in the economy,   we are often on our own to deal with the challenge of that situation.    Overall, most people are not well prepared for unexpected financial emergencies and as a society we do not have a well developed fallback safety net system in place.     

  • A recent study by Prudential Group Insurance reported that at the start of the recent 35 day federal government shutdown only about 61% of federal workers (who generally are paid better than the average worker in the U.S.) had more than $1,000 in emergency savings, about 29% had less than $1,000 in savings, and about 11% had no “rainy day” money.  
  • A recent survey from LendingTree found out that over half of Americans (52%) say that they do not have enough money put away to handle a $1,000 emergency.
  • A report published by the Federal Reserve in 2017 reported that  46% of adults in the U.S. said that if faced with a $400 unexpected expense, they would either not be able to pay it, would need to sell something to pay it, or would need to borrow money to pay it.  

Having been a person who at times has not had  significant savings, I know how stressful that situation is,  and I know how difficult juggling payments to cover an unexpected expense can be, or figuring out how to pay bills when  our income suddenly slowed or stopped.    

Being better prepared financially for emergencies is hard, but it is possible.  Here are three areas to work on to allow more room for developing emergency savings.  We do not need to do all three of them,  but do at least one, and doing two is even better, and doing all three will help even more.  

1)   Increase the amount of money coming in every month

         –Develop a second or third source of income

         –Have other family members develop additional sources of income, even if it   is  pick up jobs like mowing grass or babysitting so that they can  pay more of their own expenses.  

         –Ask for a raise, or work less hours for the same pay, or get some other additional job benefit that adds value to you.  

         –Take a job that pays more, or has better benefits, or means working less,  or requires less expense (like shorter commute, or less childcare needed)

2)  Decrease the amount of money going out every month

        –Pack a lunch every day instead of buying a lunch

        –Brew your own coffee or tea

        –carpool to work, or work from home some days

        –set monthly budget  limits for each family member 

        –buy clothes at the thrift shop instead of buying new

        –learn skills to fix things when they break

        –spend below your means

        –pay on time so you do not have late fees

        –Do recreational activities that are fun and either free or low cost

        –pay off debt

3)  Pay the savings account first each month before paying any other bills and only draw on the savings account for true emergencies.

       –Whether it is $10 or $100 or $1,000  pay your savings account first everymonth before paying any other bills.  Have it be an automatic draft so that it happens.  If the money is not in your checking account you will not be able to spend it.   Only use the savings account for true “emergencies.”

The average American family spends about $5,000/month on expenses.     You might need more or less than this amount depending on where you live, family size, and other variables.    A good rule of thumb is to have at least 3 months of “emergency” savings, or about $15,000 for the average family.    

For more information about Emergency Readiness or to learn about workshops on Emergency Readiness see more at