If you are thinking about budgeting for an emergency that takes away your finances for a few months, like a job loss, a medical emergency or a family emergency, there is a basic plan you can use to know what you are going to need.

Emergency Budget Funds Long Term
Rent or mortgage for one month ________ x 3 = $___________
Car loan for one month ________ x 3 = $___________
Utilities for one month ________ x 3 = $___________
Vehicle costs for one month ______ x 3 = $___________
Food costs for one month ________ x 3 = $___________
Other debts for one month _______ x 3 = $___________
Total amount for emergency savings account fund= $___________

This is a way to plan the money you are going to need for the instance that you are out of income for 3 months or less. The next step is deciding how you are going to save this money up without it causing too much of a kink in your normal financial lives.

After you have set your budget up for normal expenses, it is a good idea to take the money above your regular bills and put a portion of it away for emergencies. This would be in two categories:

Emergency short term: Medical or family problems that cost more than the allotted medical or family expenditures in your budget, but only short term.

Emergency long term: This is the emergency fund that would carry your family in the instance that a long-term medical, family or financial problem occurs.

Of course this fund will take some time to build up, because it covers the debts that would occur for your life on a monthly basis times three. But, the sooner you start on this fund the sooner it will be available.

When you are setting up the amount you would need for a short-term emergency, you want to consider these items when you are setting up your budget.

Emergency Budget Funds Short Term
2 days to 1 weeks pay $___________
Prescription costs $___________
Fuel or flight charges in case travel is needed $___________
Child care funds $___________
Medical co pay if applicable $___________
Hotel, and expenses for being from home if applicable $___________
Total amount for emergency savings account fund= $___________

Saving money for a rainy day is never easy. This is especially now, with the economy in the financial debt it is in. However, if you track your spending habits, and money that is spent on things that are not as important as being able to cover the cost of an emergency, you will find there is more money available than what you originally considered.

If you calculate the costs of a loan or paying for expenses from your budget and missing payments on other bills, then having to pay late fees, you will find that it is much less expensive to calculate and stick to budgeting for emergencies.