Emergency Funds

This module demystifies emergency funds—what they are, why you need one even as a teen, and how to build, store, and maintain your financial safety net. You’ll learn when to tap into it versus when to resist, strategies to grow it faster, and how it fits into a broader plan of savings, investing, and life goals.

Learning Objectives:

Upon completion of this module, students will:

• Define an Emergency Fund: Articulate what an emergency fund is, why credit shouldn’t replace it, and the kinds of unexpected expenses it’s designed to cover.
• Establish Savings Targets & Methods: Determine an appropriate savings goal (e.g., $500–$1,000 or 1–2 months’ expenses), then implement regular saving strategies—percent‑of‑paycheck, cutting discretionary spending, side hustles, and automations.
• Select & Secure Storage: Compare options for holding your emergency fund—separate savings account vs. home cash—and choose a risk‑free, easily accessible place that limits temptation.
• Manage & Replenish Funds: Set rules for legitimate emergencies, rebuild after use via adjusted budgets and accelerated savings rates, and maintain the fund through regular reviews and adjustments as life changes.
• Integrate with Broader Financial Goals: Balance emergency savings with other objectives (planned purchases, investing, fun money) by using multiple savings buckets and shifting contributions once your fund is fully stocked.