Saving for single moms can be difficult when you have one income that has to cover the household bills, children’s extras, and everyday life. It seems like it is hard enough to find money left over for yourself, let alone saving. However saving is extremely important even if you have a limited available income. Saving is important because savings allows us to be prepared in case of an emergency, provides peace of mind, helps to prevent a catastrophic loss, or credit card charges.
I recommend that you have two types of cash savings accounts.
Emergency Fund. This is a savings account where you should aim to have 6 – 9 months of expenses. This account will cover in case of a catastrophic event like a job loss. This account should cover you if your income significantly dropped or was eliminated. This is the cash cushion that will allow you to continue to pay your bills. This account should not be used for non-emergency purchases. To avoid the spending temptation, have this account in a different financial institution than your checking account.
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