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PERSONAL FINANCE
Retirement

Why every woman needs an emergency fund

Margarette Burnette
NerdWallet
Women earn less, save less and live longer than men. That's a drain on the rainy day fund.

No one wants a surprise medical bill or unexpected air conditioner repair charge. But if you have an emergency fund, an unexpected expense or drop in income is less likely to harm your long-term financial plans.

"Everyone needs an emergency fund, because unexpected things do happen, like losing a job or needing repairs on your home," says Abigail Gunderson, a certified financial planner in Houston. This is especially important for women, who statistically outlive men but earn less, she says.

But women typically save about half the amount of money that men stash away, a recent survey from BMO Financial Group shows. And research from the Employee Benefit Research Institute in Washington indicates that nearly 44% of unmarried women have less than $1,000 saved, compared with only 32% of unmarried men.

It really doesn't take much -- just one calamity -- for you to figure out how important it is to have an emergency fund. For Michelle Balducci-Connelly that moment arrived when she lost her first job shortly after graduating college.

"It was tough," says the professional photographer in St. Louis. "Once I started working again, I knew I never wanted to go through that feeling again, so I made a point to contribute to an emergency fund."

If you could use a bigger cash cushion for emergencies, here are four steps to build one.

1. Figure out how much you need to save. Think about how much money you usually spend to pay for your needs each month, Gunderson says.

"You can use that amount as a guide to know how much you'll probably need to set aside for an emergency fund," she says.

Many financial experts suggest putting away enough money to cover between three and six months of routine expenses. That way, if you lose your job or a source of income, you have enough to live on until you can get back on your feet. But if you believe that it would take longer than six months to replenish your income or get a new job, then it would be smart to save even more, like a year's worth of expenses, Gunderson says.

2. Start small. Building a savings account that could cover six months or more of expenses can be daunting. It may be easier to think about taking the first step and putting some smaller amount of money into an emergency fund, even if you're a long way from reaching your objective, says Andrew Poulos, a financial advisor in Tucker, Georgia.

Try to set aside some cash every month with each paycheck and promise yourself that you won't touch it unless there's an emergency, he says.

"I recommend to clients to try and save at least 10% of each paycheck, and if they can save even more, that just helps build the savings even faster," Poulos says.

One easy way to do this is to create an automatic transfer from your checking to your savings account. Balducci-Connelly says that with this routine, she was able to create a sizable rainy day stash in just a few months.

Another option is to use an unexpected bonus or tax refund check only for your emergency savings, Poulos says. Also, if you have some spare time, it may make sense to find a temporary part-time job to earn extra cash and build a financial cushion.

3. Keep your money accessible. Even though you won't want to take out money unless it's absolutely necessary, you'll want fast, easy access in an emergency. For that reason, it's probably best to keep the funds in an account that doesn't charge penalties or impose delays, such as a separate checking, savings or money market account, Gunderson says. One benefit of this approach is the interest that may be generated, so you could earn some income on your emergency fund, even though that wouldn't be its main purpose.

4. Use cautiously. Try not to think of your emergency fund as an option whenever you want to buy some big-ticket item that's not in your budget. If you find that you're constantly tapping your rainy-day stash, it may be time to adjust your budget in other areas and lower your expenses.

You can still splurge on luxury items, but you should set up a different savings account for that purpose. That way, you'll know that your emergency cash will be there when unexpected costs arise, and you'll be less likely to go into debt to pay for them.

If you do have to tap into your rainy-day fund, try to build it back up as soon as possible, Poulos says. "Save accordingly until life gets back to normal," he says.

Building an emergency fund can help you prepare for unexpected, costly surprises. If you save up beforehand, keep your money in an easy-access account, and make sure to use it only for emergencies, you can be that much more confident in your ability to handle life's financial curveballs.

NerdWallet is a USA TODAY content partner providing general news, commentary and coverage from around the Web. Its content is produced independently of USA TODAY.

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