Financial Literacy Month may be ending but…

If you’re wondering what you should focus on first in terms of creating financial well-being, I always emphasize that building a sufficient emergency fund, or what I like to call your “Peace of Mind” fund, and parking those dollars in an easily accessible account such as a checking or savings account in YOUR name alone is a non-negotiable, even as a woman today.
There’s no one-size-fits-all, but a general rule of thumb is to have 3 to 6 months of essential living expenses saved if you’re a salaried employee and 6 to 9 months if you’re self-employed. The key is to have the right amount given your unique needs, but please note that too much cash loses purchasing power over time with inflation, which can have a negative impact on your overall financial goals.

Why is having a “Peace of Mind” fund so imperative for women?
It’s not just about a blown car tire that needs to be replaced, or an unexpected and pricey emergency pet surgery. It’s about being financially prepared for life’s uncertainties which can have a longer term negative financial impact, whether it’s sudden unemployment or a health crisis. Consider this: would you be less anxious if you knew you could cover basic living expenses for a few months in case of job loss? Or if you had to deal with a period of illness or injury without worrying about financial strain?

According to the Council for Disability Awareness, some of the top long-term disability concerns for women include 1) mental health issues including depression and anxiety, 2) cancer, and 3) injuries such as fractures, sprains, and strains of muscles and ligaments. . And according to the American Bar Association, just over one in four (25%) of today’s 20-year-olds will become disabled before they retire.
While health insurance can help cover medical bills, it generally won’t cover rent, utilities, or groceries. Having an emergency fund can help bridge the gap during a waiting period before disability income kicks in(if you have it), or cover essential expenses if you have to fully rely on your savings in terms of income replacement. The key is having these funds set aside and ready if you need the money, and providing peace of mind and the ability to focus on recovery.

Additionally, let’s talk about leaving toxic relationships. Many women find themselves trapped in abusive or unhealthy partnerships due to financial dependence. The emotional foundation of self-love, self-respect, and feeling deserving of a better life is the starting point, but financial independence is crucial for making that leap. That “Peace of Mind” fund may very well represent the necessary resources that many women would need to feel more empowered to walk away from toxic situations, knowing they are able to support themselves.