Have you ever heard of the game “Poetry for Neanderthals”? It’s a board game where players get whacked with an inflatable bat for using words with more than one syllable. My son’s favorite part is, of course, the inflatable bat. He loves playfully hitting me with it whenever he gets the chance. While it doesn’t hurt, it’s certainly an inconvenience, especially when focusing on the game.

This experience is similar to facing an unexpected expense when you have an emergency fund in place. No one likes spending their savings on car repairs or medical bills, but having the money set aside means it’s only  an inconvenience rather than a stressful ordeal. Without an emergency fund, it’s like getting hit with a real, wooden bat—painful and potentially crippling. Facing an unexpected expense without an emergency fund puts us in a position where we are relying on high-interest credit card debt or personal loans to cover these costs. 

What is an Emergency Fund?

An emergency fund is a sum of money set aside to cover unexpected financial emergencies or unplanned expenses. It’s a financial safety net to help you avoid debt and maintain financial stability when unforeseen circumstances arise. Sadly, most Americans don’t save for such events. According to a recent Bankrate report, more than half of Americans reported they can’t pay a $1,000 emergency expense from their savings. 

Common Emergencies  for Young People

Everyone encounters financial emergencies. For young people, these can include:

• Medical Emergencies: Trips to the ER, urgent care visits, or unexpected medical treatments.
• Car Problems: Breakdowns, accidents, or routine maintenance.
• Housing Issues: Unexpected repairs, additional security deposits, or rent increases.
• Technology Failures: Broken laptops or phones essential for studying.
• Travel Emergencies: Sudden family emergencies requiring travel.
• Academic Costs: Unexpected course materials or lab fees.
• Loss of Income: Job loss or reduced work hours.
• Educational Opportunities: Fees for special programs or certifications.
• Legal Issues: Traffic tickets or identity theft.

The Biblical Perspective

Financial stress is a common source of anxiety, especially for young people. An emergency fund can alleviate this stress, providing a sense of security and peace of mind. Proverbs 21:20 (NIV) says, “The wise store up choice food and olive oil, but fools gulp theirs down.” This verse emphasizes the importance of being prudent and preparing for the future. 

We also see this principle in Genesis 41:34-36, where Joseph interprets Pharaoh’s dream about seven fat cows and seven skinny cows. The fat cows represent seven years of prosperity, followed by seven years of famine. Joseph advises Pharaoh to store up grain during the prosperous years to get through the famine. This ancient form of an emergency fund shows the value of saving for future uncertainties.

Characteristics of an Emergency Fund

• Easily Accessible. The money should be kept in a savings account or other liquid accounts where it can be quickly and easily accessed when needed.
• Separate from Regular Savings. It should be separate from your regular savings or investment accounts to ensure that it is only used for emergencies.
• Sufficient Amount. Financial experts typically recommend having three to six months’ worth of living expenses in your emergency fund. However, start with a smaller goal, such as $500 to $1,000. 

How to Start an Emergency Fund

Starting an emergency fund may seem daunting, but it’s manageable with a few simple steps:

• Set a Goal. Calculate your monthly expenses and develop a number to aim for. That will provide you with a sufficient nest egg should an emergency hit. 
• Budget. Create a budget to identify areas where you can cut back and save more. Even small amounts add up over time.
• Automate Savings. Set up an automatic monthly transfer to your savings account to ensure consistent contributions.
• Earn Extra Income. To boost your savings, consider part-time jobs, freelancing or selling items you no longer need.
• Stay Committed. Building an emergency fund takes time and discipline. Stay focused on your goal and remember the peace and security it will bring.

While living in the moment is tempting, setting up an emergency fund is a wise and necessary step for financial stability and peace of mind. It aligns with biblical principles of prudence, responsibility and preparation, helping you navigate life’s uncertainties with confidence and faith.

By embracing this practice, you are securing your financial future and honoring the wisdom found in Scripture. You are preparing yourself to face life’s challenges with resilience and grace. Whether you’re 16 or 116, an emergency fund is always a smart move.

Ultimately, having sufficient savings allows you to navigate times of scarcity without compromising your ability to be generous. By being prepared, you can handle unexpected expenses without letting the unpredictable stop you from living generously with what God has given you.