SWOF: How Big Does My Emergency Fund Really Need to Be?

Experts in the personal finance industry, including us here at Your Money Line, typically recommend three months of expenses for an emergency fund. But what if you’re a single woman, particularly a single woman over fifty (SWOF)? Does three months make sense?

The three month guideline is intended to ensure you have enough ready cash to cover emergencies, including a worst case scenario of losing your job. Ideally, this money should carry you through the emergency. But if you’re the only person with an income and you’re solely dependent upon yourself, is three months really sufficient? If you lost your job tomorrow, would you be able to find another position before the money runs out?

If you’re over 50 and lose your job but you’re not quite ready to retire, job hunting is in your very near future. Looking for work for the over 50 crowd isn’t exactly a walk in the park, especially for women. The Federal Reserve Bank of St. Louis published a study that showed that half of women over 50 who are unemployed are long-term unemployed. Age discrimination is real, especially towards women. According to AARP, 64% of women say they’ve experienced age discrimination, compared to 59% of men in the workplace. Another study by the National Bureau of Economic Research found that while men and women both face ageism, women face it earlier and with greater intensity.

Of course, losing your job is a worst case scenario, but it’s this kind of situation that could have a lasting and devastating effect on your finances. As a single person, you must plan for the worst case because there aren’t alternatives to your income. As a more mature female, you face the additional risk of a prolonged search for employment.

These risks are too real and too possible to ignore. Single women over fifty should strongly consider having a minimum of six months of savings for emergencies.

Please, for your future self, embark on a journey to build up your emergency savings to six months of expenses. I know it’ll be hard but we can help you build a plan to get there.