Don’t Start an Emergency Fund. Start this instead. (Money Mindset)

Okay.  I admit.  Telling you 'don't start an emergency fund' does sound a bit crazy.  But trust me, it's not.  It is all in the wording.

The idea behind the emergency fund is a good one.  You do need to have some money saved up in case the unexpected happens and you need extra cash to cover it.

The only thing I'm suggesting is changing the name.  You don't have to follow the crowd and continue calling your stash cash an 'emergency fund'.  You can change it.

You might be thinking, why does something so small like changing a name even matter?  Because, this simple act of changing how you call your back up money, could have dramatic effects on your financial future.

Let's explore how below.

What is an Emergency Fund?

An emergency fund is simply a savings account that you contribute to every month to cover unexpected expenses.  It is, indeed, for emergencies.  And should be used for emergencies only.

You should aim to have at least 6 months worth of living expenses in your emergency fund.  That way, should the economy take a turn for the worst and you lose your job, you will have money to hold you over until you can get another one.

Not having an emergency fund is a huge risk and can be very devastating to your financial future.  What happens if you suddenly need medical attention or your car gets totaled?

Would you have the money to deal with it?  If you are like most people, the answer is no.  

And it is at these times that we find ourselves falling more and more into debt as we need to borrow money just to pay the bills.

Life is full of the unexpected.  And if you want to truly be in control of your finances, you definitely need an emergency fund.

Now that you know you definitely need one, it's time to scrap that name for one that is more suitable to your purpose.

A name worthy of being your right hand man on your journey to financial freedom.

What You Should Have Instead of an Emergency Fund

I have seen the light and decided to make a change.

That's genius.  Instead of saying emergency which has pretty obvious negative connotations, why not call it something more uplifting, like abundance.

I'm not sure why this thought never occurred to me before since my sister had told to me years ago about her "Having" account.  

Why does she call it her having account? You ask.

Because when she looks at it she is reminded that she has money and always will.

Total.  Mind shift.

It is these mindset shifts that will truly help you build that healthy money mindset.  

While it may seem minor at first glance, changing how you call your emergency fund really goes a long way to changing your view on money and your relationship with it.

The Benefits of Having an Abundance Fund

There are some profound advantages to having an "abundance" fund instead of an "emergency" fund.  And, mainly, it has to do with the shift that occurs in your perception, outlook, and money mindset.  

Plus, quietly, it just adds a little more spice to your life.

Changing Your Perception

There's no doubt about it.  The word emergency does not make you feel all warm and fuzzy inside.  Honestly, it is more liable to cause your heart to stop than produce tears of joy.  

So by changing how you refer to your stash of cash to something more uplifting, like an abundance fund, you change your perception of the money you are saving.

It is no longer the doom-and-gloom money but money that represents hope, fulfillment, and financial wellness.

Instead of looking at your account and wondering whether the money there is enough to handle the next impending disaster, you can look at your account with joy.  Knowing that you have an abundance of money available to you.

So go on.  Check it every week, every day if you want.  

And bask in the glory of knowing that you have an abundance of money and that more of it is on the way.

Your Outlook (Positivity)

Along the same line, as you shift your perception of that extra cash you also shift your perception of life.  Subtle.  But true.

By changing the name of your emergency fund to an abundance fund or a having account, you shift your mind from focusing on the negative to focusing on something positive.

And having a positive outlook on life goes a long way to ensuring you have a happy and fulfilling one.

Some of us are not born with the positivity gene but we can become positive by making it a habit.  One way to do this is to surround ourselves with positivity. 

And seeing your Abundance fund on your budget sheet will add an extra splash of positivity to your day.

Your Money Mindset

One cannot stress enough how much having a healthy money mindset helps you escape the paycheck to paycheck cycle and achieve your financial goals.

And when you increase your positivity and outlook on life, you push your money mindset in the right direction.  

Money is everywhere and there is enough for everyone.  But that is hard to see if you don't have the right mindset.  So we need to take every chance we get to reaffirm positive views on money.  And this name change can be a start.

Just hearing the word abundance should make your heart leap with joy. I'm smiling.  Are you? 

Makes it More Fun

To add extra icing to this cake, changing the name from emergency fund to abundance fund is simply way more fun.  

It makes saving less of a dull I have to do this cause my Mama is making me sort of thing to a YES! Look at my money grow! sort of thing.

I mean, HELLO, contributing to your Abundance  fund is wayyyy more exciting and up-lifting than contributing to your Emergency fund.

And because of this you will want to contribute to it more!  So you'd be able to grow your savings much much faster. 

How much should I have in my Abundance Fund?

Good question.  It really depends on the type of job/ job security (or lack thereof) you have.

Most finance gurus recommend having at least 6 months of necessary expenses in your Abundance fund.  But if your job is lacking a safety button, you may want to bump that up to a year's worth of expenses.

Sadly, due to the recent pandemic we all may want to start saving 12 months of expenses as well.  Better safe than sorry.

All in All

Don't start an emergency fund.  Start an abundance fund, a having account, a joyous money fund, whatever.

It's up to you what you will call your stash of extra cash.  But I say, make it something fun and up-lifting.  Life is meant to be fun and enjoyable!

And besides, with a new killer name at least you will enjoy contributing to it each month and watching that money grow.

So hide yo' kids, hide yo' wives.  Cause there's a new account in town: The Abundance Fund.  And it is here to stay.