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If 2020 has taught us anything, it’s that we need to be prepared for anything.

For bloggers + business owners, this is especially true because there’s no safety net for you if your business fails.

That’s the uncertainty that comes with self-employment, and one of the toughest mental barriers to overcome.

There’s gonna be months where you might make hundreds of dollars every day, and others where you barely make enough for a cup of coffee at Starbucks.

But your bills still gotta be paid either way, girl.

That’s why it’s so dang important to build an emergency fund! Here’s what you need to know about ’em.

WHAT IS AN EMERGENCY FUND?

Let me explain what an emergency fund is (and what it isn’t) because sometimes people have a different definition.

An emergency fund (or ‘rainy day’ fund) is money that you specifically set aside to use for unexpected expenses.

This is NOT money that you use to spend on trips, get haircuts, or pay off debt.

Your emergency fund is meant to pay for things like your car breaking down and needing repairs, for example.

Or, if you were to lose your job unexpectedly (due to a global pandemic, for example) this money would help in the short-term to pay the bills until you found another job.

Don’t confuse this fund with a savings account that you use for vacation or paying on your credit cards or anything like that. This money is meant for strict emergencies and should rarely ever be touched.

WHY SHOULD YOU START AN EMERGENCY FUND?

Think of your emergency fund as your safety net in life.

For bloggers, it’s SUPER important to have an emergency fund, because your income will vary from month-to-month.

Look at Alex and Lauren’s income reports on Create and Go and you’ll see what I mean. Their blogs are super successful but there are still months where they don’t make as much as others, and that’s totally normal!

If your goal is for your blog to one day be your only source of income, you need an emergency fund. This way you can make sure you’re taking care of your bills when there’s a lull in sales.

HOW TO CALCULATE YOUR EMERGENCY FUND

Really, it’s up to you how much you want to set aside for your emergency fund.

Most people start with an emergency fund that’ll last them for 3 months.

If you have debt (credit cards, car payments, etc.) I would stick with a 3 month emergency fund and then use anything else you save to work on paying off your debts so you can cut down on that interest.

If you don’t have any debt, I’d build up your emergency fund to a 6-month cache.

Before we can calculate your emergency fund, you need to add up all of your monthly expenses that are absolutely essential to you.

This includes things like:

  • rent/mortgage
  • utilities
  • groceries
  • any other necessary bill

So, ya know, the things you need to live.

Notice that this list doesn’t include things like going out to eat, subscription services (Netflix, Hulu, etc.) because, worst case scenario, you could give up those things if you had to.

Once you’ve got those bills added up, plug it in to this formula:

(SUM OF NECESSARY EXPENSES) x (# OF MONTHS) = EMERGENCY FUND AMOUNT

This will give you the goal you need to work towards!

HOW TO BUILD AN EMERGENCY FUND

Now that you know the number you need to work towards, here are some tips I recommend to start building up your fund. These are all things my husband and I did (and still do!) to help us save money.

1. PRIORITZE SAVING

Something I’ve learned as an adult is that it’s much easier to save money if you put it aside BEFORE divvying out all your other expenses.

If you have a budget (which I hope you do!) you need to make sure you’re putting money towards your savings first.

When you put money into your emergency fund last, you risk spending valuable money on random things that could’ve gone towards preparing yourself for the future.

So when you get paid, DON’T put whatever’s leftover at the end of the month into savings.

Instead, put a set amount into savings FIRST, that way you know that you’re working toward that goal and making it a priority.

2. LIMIT YOUR SPENDING

Okay, duh. Obviously when you spend less, you can save more.

But if you take the time to actually look at what you’re spending money on, and how much you’re spending, I think you’d be surprised.

I know I was, when I realized how much me and my husband were spending on eating out at restaurants.

I’m honestly embarrassed at the amount that we were spending just by eating out. I think it’s just really easy to eat out at restaurants a few times a week, then check your bank account and wonder how the hell $100 went missing.

If you’re in that same boat, I recommend meal planning and prepping your meals so you’ve got food at home. You can honestly save a lot of money this way, and can then put it towards your savings.

So pay attention to your spending habits! Use an app like Mint (it’s free!) to help you budget and track your spending.

3. DIVERSIFY YOUR INCOME

Whether you start a side hustle, or work a part-time job somewhere, try to diversify and increase your income.

Easier said than done, right?

It doesn’t have to be a lot of extra work, but if you can try some simple methods to earning more money to add to your emergency fund, you’ll thank yourself later.

When we were building our emergency fund/savings, I would work a couple extra shifts at work, take online surveys, and even sell some of our unwanted stuff online (which was a win-win because I was able to declutter our house and make money at the same time!)

Hopefully these ideas give you a good head start towards building up your emergency fund as a blogger! Feel free to leave any questions for me down below! 🙂

And don’t forget to save this post on Pinterest!

Why You Need to Build an Emergency Fund as a Blogger + How to Do It