emergency fund jar with coins

Saving for the Unexpected

Feb 20, 2020
Empower Insights

How an emergency fund helped shield one couple from the financial turmoil of job loss

When Kelly Burch was six months' pregnant with her second child, she received some shocking news: Her husband, Mark, had lost his job and, with it, the family’s source of steady income.

As a freelance writer, Kelly typically sees an ebb and flow in monthly income, and the sudden loss of Mark’s law enforcement job also meant losing the stability of his regular paychecks. While the Concord, New Hampshire, couple crunched numbers trying to determine how many more clients Kelly would need to take on to pay the bills, they turned to their emergency fund to keep them afloat in the short term.

“Having the emergency fund allowed us to triage without panicking,” Kelly says. “We had money to live on temporarily, and that took off some financial pressure in what was an immensely stressful situation.”

importance of emergency fund

The $8,000 the couple had set aside for emergencies enabled them to meet their financial obligations while Kelly worked on picking up more freelance work. In just a few months, Kelly had taken on enough additional work that they could cover their expenses every month. When their second child was born in June 2018, they decided that Mark would stay home with both kids, allowing them to save money on childcare costs, while Kelly scaled up her business.

Mark found a new job in security a week after the baby turned one. But after a year of living as a single-income household, the couple now plans to put his entire paycheck toward rebuilding their emergency fund. They aim to save $10,000 over the next five months. “Having seen how important the emergency fund was at one time, we're eager to have it fully funded again,” says Kelly. “Life has shown us that even the most secure jobs can suddenly disappear.”

Ultimately, Kelly and Mark’s emergency fund helped shield them from financial turmoil during a stressful time, and it helped them develop strong financial habits that will serve them well in the future.

“It was far from ideal that my husband lost his job when I was six months' pregnant,” Kelly says. “But the emergency fund gave us the breathing room to make rational long-term decisions rather than panicking because we needed to cover expenses in the short term.”

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