Building An Emergency Fund with Your Job Share Partner

Written by Ashia Diggins

Job share partners share everything—from the same full-time job and projects, to even salaries and benefits. In fact, job sharers Tracy Tanner and Blake Howard Norton let us in on their personal experience of sharing money with each other. Although they had different personal needs and expenses, the way they approached financial management became a joint matter, too. This unique partnership opens up many uncharted territories in fiscal responsibility. One of those is the set up of a shared emergency fund.

What is an emergency fund?

Before going into how to build an emergency fund with your job share partner, it’s important to understand what it actually is. Simply put, an emergency fund is a form of savings fund that you can dip into in case a financial emergency occurs. It should be separate from your monthly budget and your actual savings. The reason is, this money is specifically for situations that you don’t expect to happen but just might. These emergencies may require you to settle a bill or adapt to a sudden loss of income or even an added expense.

Losing your job or car, getting sick or injured, and needing immediate home repairs are some examples of circumstances where an emergency fund will come in handy. An emergency fund study by Bank Rate revealed that roughly 55 million Americans don’t have anything set aside for these instances. Such is the case for millennials as well as baby boomers. Interestingly, adults aged 73 and above — the generation preceding baby boomers — had their emergency funds set up.

Why do you need an emergency fund?

Job sharing or not, everyone needs an emergency fund for many reasons. No one can predict an expensive emergency and having a safety net softens the blow of a financial shock. It also minimizes the risk of falling into financial hardship, which can easily lead you into a downward spiral. After all, we all know how difficult it is to get out of a mountain of debt.

In this way, it also alleviates any sort of financial stress, which can wreak havoc in one’s overall wellness. In fact, a financial stress survey conducted by Marcus found that out of all the participants who took part in the survey, ‘40 percent said their finances keep them up at night.’ Sleep deprivation is just the beginning, and this can lead to full-blown physical conditions such as diabetes and heart disease, as well as psychological conditions like anxiety and depression.

How can we help each other out in setting up an emergency fund?

job share partners work on a planGiven those pressing realities, building an emergency fund with the help of your job share partner becomes all the more important. It is usually an individual responsibility or something that life partners do. But there’s no rule against building an emergency fund with your job share partner. Given that you can be transparent about financial matters with each other, it might even be a good idea. There are two notable advantages of this set-up. The first is that you have someone you can trust. Another is that they can serve as your accountability partner. Your partner will ensure that you’re actually setting aside funds for emergencies.

How big of an emergency fund should you have?

So how big of an emergency fund should you have? The Balance recommends starting with around three to six months’ worth of expenses tucked away for safety. You should factor in details such as the size of your family, mortgages or rent, vehicles, and so on. Given that two of you will be sharing the fund, that initial computation might not be sufficient. Doubling it — or multiplying it according to the number of people in your job share team — is more logical in setting up an emergency fund.

Emergency funds can benefit commission-based job sharers

An emergency fund might also come in handy for commission-based job sharers who lack a steady income stream. It can serve as a safety net for freelancing teams during months when work is sparse. This is especially important as job sharers still have to split whatever earnings they make. In the event that one of you has to dip into your savings, they should be responsible for replenishing it based on the amount taken out. This requires a lot of trust, something that job partners necessarily have a lot of.

Additionally, finance experts recommend putting your emergency fund in one of four savings accounts. A personal finance guide on Business Insider suggests high-yield savings accounts, certificates of deposits, Roth IRA, or money-market accounts for emergency fund savings. These offer higher rates of return compared to traditional savings accounts. With the exception of Roth IRA, all of these are available for joint ownership. For this reason, you can have your pick between the three. Given that the amount set aside will be bigger than usual, as it will be for at least two job sharers, you’ll be able to get heftier returns as well.

Whether you decide to set up an emergency fund as a team or individually, your job share partner can still serve as your accountability partner. In personal finance, having someone who understands your needs and can help you reach your goals is an invaluable partnership — something that job sharers definitely have.



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