Save Emergency Fund

Do Women Need Bigger Emergency Funds Than Men?  

Kristen Campbell  |  March 7, 2023

Some financial planners say women need bigger emergency funds than men. Check out these ideas on how to start one or build it up. 

By now, you probably know you’re supposed to have an emergency fund

You may have filed this information alongside all sorts of other tasks under the heading of Important Things to Do (But Never Quite Get Around to Doing). 

We hear you. But you might want to tackle this one sooner rather than later, especially if you’re a woman – and particularly if you’re a woman who’s a single mom. 

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“Women are more likely to help with the care of a loved one. This can mean unexpected travel expenses,” writes Betty Wang, founder and financial adviser at BW Financial Planning in Denver. “For single moms, my recommendation is at least 12 months of expenses saved.” Noting that a single mom’s life is already stressful and hectic, Wang writes that such parents need financial flexibility to make choices that prioritize children rather than just money.

Unfortunately, there’s another reason women need larger emergency funds than men. Statistics show in the current society female employees were still significantly more likely to be dismissed from their jobs than male employees, says Kristy Jiayi Xu, CFP and CEO of Global Wealth Harbor LLC in Walnut Creek, Calif.

Noting that women are more likely to take time off from work for childbirth, child care or family emergencies, she writes: “That means emergency funds are more important to women in general because women have a bigger chance of unexpected loss of salaries.”

Not everyone sees gender as a factor in determining the sum set aside in your emergency fund. 

Consider Your Household Size 

Karen Ogden, CFP and partner at Envest Asset Management in Ridgefield, Conn., notes that emergency funds don’t have gender-specific issues; in general, she writes, the number of people relying on an income and fixed expenses should determine how much you have in your fund.

Ogden also identifies the level of job you have and the ease of finding a similar-paying job as significant. Many people with very large incomes still live “very close to the line” and don’t account for the fact that higher-paying roles have a longer lead time to replace, she writes.

If you’re nearing retirement, what you need from – and in – your emergency fund may vary too, depending on your circumstances. 

While not necessarily advising women to build up their emergency funds as they get closer to retirement, Wang writes that she does recommend women start building a “war chest” of cash and shorter-term bonds. The “war chest,” Wang explains, is preparation for events we know will happen — down markets. “We know falling markets will happen,” she writes. “One out of four years is a down market. We just don’t know when it will occur or for how long it will last.”

Not All Retirements Are by Choice

More personal events may affect your financial security as well.

“Some women may not have the choice of when they retire,” Wang writes, noting that some are downsized, and due to ageism and the high salary they command, have a difficult time finding a comparable job. “Others are forced to retire due to their own bad health,” she adds. “And women more so than men leave their careers to care for their aging parents.”

Observing that women are intuitive, Wang writes they “start sensing or seeing subtle changes in their work life due to ageism. Or they start seeing mental and physical declines of loved ones and know there aren’t care options that work for their family.” 

Creating Peace of Mind  

When clients come to her with these concerns, building their war chests well in advance of their expected retirement ages commences, she notes, adding: “Planning ahead can give women much needed financial flexibility and emotional space when the time comes.”

Ogden notes that more than an emergency fund, “someone should have a fulsome plan about saving for retirement spending.” She adds: “An emergency fund is a supplement to retirement savings at every age. Even in retirement, unplanned expenses can arise that throw off the best ‘plan’ for retirement spending.”

That said, Michael R. Caligiuri, founder and CEO of Caligiuri Financial in Columbus, Ohio, observes that people who are closer to retirement tend to have larger investment portfolios and therefore may not have a need for an emergency fund. “If you have a billion dollars in an individual account invested for retirement, do you really need an emergency fund?” he asks. “No.”

For those without a sizable cushion and the need to create one, here are some helpful hints and reminders:

Define What Constitutes an Emergency

An emergency fund is not meant for a last-minute trip to Cabo, writes Brittany Wolff, CFP at Wolff Financial in Greenville, S.C. Pamela J. Horack, CFP and founder of Pathfinder Planning LLC in Lake Wylie, S.C., actually calls for getting rid of the emergency fund nomenclature and renaming it “something dire that resonates with you.” She advises that people keep a separate fund for expenses such as those related to automotive and home maintenance, along with medical deductibles or copays. 

Set a Goal For Your Fund

Typically, some financial planners note, an emergency fund includes resources to cover three to six months’ worth of expenses. Jovan Johnson, financial adviser and co-owner of Atlanta-based Piece of Wealth Planning LLC, writes that since the pandemic he recommends having eight to 12 months of expenses in an emergency fund. “I would rather caution on the safe side as we don’t know how long a tough period can last,” he writes. “Peace of mind is worth every cent.” 

To determine how much you should have in your fund, Brittany Brinckerhoff, a financial adviser at Hilltop Wealth Advisors in Chapel Hill, N.C., writes that she recommends people consider how secure a job feels, whether one’s industry goes through cycles of hiring and layoffs or is steady, the ease of finding a new job, marital status and, if applicable, the job security of one’s partner. She notes that oftentimes people have a specific amount that they prefer to keep in cash.

Say “When”

Many women start hoarding their cash and hold more than they need for an emergency fund or near-term needs, Wolff writes, and they miss out on the growth they can get by investing.

Start Now

It’s never too late to start setting aside cash, Brinckerhoff notes. “Start small,” she writes, adding that “you don’t need to get to your target emergency fund right away.”  In addition to setting up small monthly transfers from your checking account to your emergency fund, consider using your tax refund or saving a portion of any bonuses or raises you’re expecting, Johnson writes. “If you are responsible with your credit card, consider opting for cash rewards so you can save this towards your emergency fund,” he adds.

Keep it Accessible – But Not Too Accessible

Kelly Berenbaum, founder and lead planner at Blue Tree Financial in Winter Park, Fla., suggests keeping your emergency fund in a high-yield savings account at an FDIC-insured bank. “I often recommend that the emergency fund be kept at a completely separate bank from your regular checking and savings account so that you have to be deliberate about moving the money to spend it,” she writes, adding that the extra day or so to transfer funds can help ward off the temptation to spend it for non-emergencies or splurges.


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