Day 4: The Rainy Day Fund—Preparing for Life’s Unexpected Storms

[6] Take a lesson from the ants, you lazybones. Learn from their ways and become wise! [7] Though they have no prince or governor or ruler to make them work, [8] they labor hard all summer, gathering food for the winter.

-Proverbs 6:6-8 NLT

Having a budget is awesome, but how do you account for the unexpected storms we discussed on Day 2? We should prepare for storms similar to how ants prepare for the winter because it's not if but when. Expect the unexpected! Vehicles break down, pets eat things they're not supposed to, and houses randomly get struck by lightning while the husband is deployed (true story)–things happen.

That's why the first step in protecting your assets is establishing an Emergency Fund (Saving at least 3-6 months of expenses). An emergency fund provides peace of mind and prevents financial crises from derailing your progress.

The truth is that about half of us aren't prepared for a financial crisis that could derail our progress. The Federal Reserve published a report in 2023 that indicates that nearly half (46%) of Americans could cover less than one month's expenses if they lost their income.

Proper planning promotes prosperity.

We've all been hit with unexpected expenses at some point in our lives. Nevertheless, those expenses sting a little less with proper planning. Just like FEMA and the Red Cross are always prepared to respond to an emergency, so should you and your household. When a crisis hits America, they have a response team on the scene ASAP! While they may not make the emergency go away, they alleviate the burden, pain, and suffering until people can get back on their feet.

What unexpected expenses have affected your household lately?

• Flat Tire?
• Sick Child?
• Hospital Stay?
• Car Breakdown?
• ER Visit?
• Job Loss?

An emergency fund isn’t just for covering surprise expenses—it’s also your safety net if you lose income. Could your household survive if a paycheck suddenly disappeared? For example, we have colleagues impacted by things like a government shutdown. Would you have time to find a new job or survive a shutdown without going into debt?

It’s Time to Plan

Unfortunately, emergencies don’t wait until we’re ready, so we need a plan that puts us in control before a crisis hits. That’s why we start building our emergency fund step by step.

Don't worry, we'll help you!

Many people feel overwhelmed when they hear “3-6 months of expenses.”

If saving 3-6 months of expenses feels overwhelming, start small. Aim for $1,000—that’s enough to handle most minor emergencies, like a car repair or a medical bill. Once you hit that milestone, do one month, then two, and so on, until you build a full emergency fund. That may require you to suspend some of your more luxurious “Lifestyle Choices” temporarily. That's okay. Sacrifice some things today so you can live more comfortably and peacefully tomorrow.

Where to Keep Your Emergency Fund

Temporarily sacrificing luxuries (like eating out or trading daily Starbucks for the free coffee at the office) will free up some cash. It's tempting to keep that extra money in your checking account and loosely call it your emergency fund. That rarely works out in our favor. It is too accessible and often causes us to redefine “emergency” in the heat of the moment.

Keep your emergency fund in a high-yield savings account where it’s available when needed—not in your checking account, where it’s tempting to spend. You want it available for true emergencies, not for impulse purchases.

The Cost of NOT Having an Emergency Fund (Debt Trap)

Having an emergency fund in an easily accessible account is a no-no. Not having an emergency fund at all is a no-no-no-no. Why? Because people who do not have an emergency fund often rely on credit cards or loans. (Again, no-no-no-no. We'll tackle debt tomorrow.)

This step is urgent!

Borrowing money in a crisis creates a deeper financial hole—one that’s hard to climb out of. Remember, we are planning ahead like ants. Did you know that ants also prepare for winter by intentionally digging tunnels and burrows to create insulated spaces where they can huddle together to withstand the cold?

You’re not digging a strategic tunnel when you rely on debt instead of savings—you’re digging a messy, unstable hole that only gets deeper and harder to climb out of. The more you borrow, the uglier your burrow gets. Saving now—before the storm hits—helps you build a strong, intentional financial shelter that keeps you secure when life’s winters come.

Just like ants build strong tunnels before winter, we can build a financial shelter before life’s storms hit. Start small, stay consistent and focused, and keep digging the right kind of tunnel—the tunnel that leads to financial freedom!

Family Moment:

It's never too early to dig a tunnel to financial freedom. Here's a great way to explain the value of saving for emergencies to your children through a fun scenario. Ask: “What if your bike broke and you needed to fix it? What would you do if you didn’t have money saved?” Have your child research spare parts and see if her emergency fund would cover the cost. Then, challenge her to set a small savings goal for future “bike emergencies”—just like adults save for bigger life emergencies.