The life-saving budget item everyone needs to know





In this budgeting series, I have been highlighting a different “slice” of the “money-pie” – a system that one of my followers coined for me. It has a number of other names – money-pots, money-buckets, but whatever you call it, its a similar idea. It is the principle of slicing you well-earned money up into different portions that each do a very different, but important job. If you want to apply the principle of “pay yourself first” to real life, then this is a way to do it.

It’s my favourite budgeting method, and takes a little bit of practice, but when you have the system nailed it’s so freeing!

The items include budgeting monthly for:

  1. Fun – 5-10%
  2. Giving/charity – 5-10%
  3. Saving for big things – 5-10%
  4. Emergency funds/paying off debt – 10%
  5. Investing – 10%
  6. Education – 5-10%
  7. Bills/essentials – 55-60%

The percentages are suggested proportions of how much money to allocate, but it depends purely on your circumstances as to what you prioritise. You may start off by not having a balance like this, but it is something to aim for.

As a reminder of what we’ve covered so far in the series:

Charity/gift giving – “Charity begins at home”

Fun – “The essential item we should all be budgeting for”

The essentials – “Spend less on this and give yourself a “payrise”

A recap of the money pie method – “A lesson I have learnt from the NHS”

This week I thought I’d write about paying a percentage of your income into one of the following “life saving” items:

  • Emergency fund
  • Extra debt repayments
  • 3-9 month f*** off fund

So what do I mean about this?

Lets tackle the emergency fund first

This is a sum of money set aside PURELY for “life saving” emergencies – like the washing machine exploding and needing repair or replacement. I’ve had to use mine in the past to replace a burst tyre on my car – no car = no work, so it definitely was a life saving fund to have!!

I strongly recommend that before you move on to either of the other two items in the list, you get this put together first. £100 per month for 10 months will mean this is created in 1 year.

This is to avoid EVER needing a “payday” loan (one of my personal bug-bears)

Do whatever it takes – sell stuff, don’t buy clothes, don’t get your hair done as regularly or anything else you can think of to save money on and throw it all at an emergency fund.

Another thing you can do is download a savings app like plum or chip? These tools automatically takes small amounts of money out of your account every few days in alignment of how you spend money. They are safe to use, and are game changers in my opinion. I can top it up anytime if I want, and the money is free to withdraw any time. Trust me, these apps are the future of how we save!

Extra debt repayments

Once you have an emergency fund tucked away safely, you need to work on the other two things. Pick which one is the most priority for you, and work on it.

The debt snowball method is where you choose your smallest debt, pay it off as quickly as you can, then once its paid off, put your minimum payments towards the next debt and so on. To get this kicked off, you need to free up some money to put towards the first debt IN ADDITION to the minimum repayment. I have an e-book on this you can download for free here.

3-9 month F*** fund

While tackling debt if you have it, the next step is to build the fund that helps you to free yourself. This could be from work, a partner, or a dodgy landlord. Whatever it is, you never know when money like this will come in handy.

If you can do this while paying off debt then all the better. £1000 isn’t a lot of money, and many disasters are more costly than that!!

One community member, Hayley, talks about her story in this podcast episode – her family suffered an unexpected and unfortunate event that highlights a real need for everyone to think about this, no matter what your age.

I wish that when I broke up with my ex I had money like this saved. It would have helped me to get back on my feet so much faster, without incurring so much debt!

The money you save is for the basics you need to get by every month. Food, shelter, utilities and transport to get to work. That’s it. If you decide to leave your job because your boss is an a-hole, then you can at least cover the basics until you figure out what to do.

It can also be a useful plug for those on maternity leave, so you can stay off for longer without worrying about money….just a thought.

How much to set aside?

This depends on you – how much money do you feel you need? It might be 3 months, but it might be longer. How quickly could you get on your feet again? Do you have income protect insurance or critical illness insurance that would help initially or after a few months?

Personal finance is exactly that – personal. So only YOU know what is right.

Take it in small steps and celebrate when you hit milestones such as every £100 you save or every month you have covered.

Where Do I Put The Money?

Whatever you do, DON’T tie this money up. Could you imagine needing money tomorrow, but your bank won’t allow you the money for a month?


Equally, DO NOT invest this money. Investing is a completely separate entity which I tackle in another post.

So this money goes into an easy access fund, preferably where you can’t see it every day. There are some great accounts out there, like the Goldman Sachs Marcus account. Hargreaves Lansdown also have a savings feature where you can pick from a whole list of options. Do a google search for best instant access accounts and see what comes up.

Final Thoughts

An emergency fund is absolutely VITAL if you are going to build wealth and feel supported – it can literally be life saving. We don’t have to go through life accepting situations just because of lack of money. By having a buffer, you free yourself from having to say “yes” when you really want to say “no”. Your health may depend on it.

Good luck, and don’t forget to join the free private facebook group to share your wins and worries!





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8 thoughts on “The life-saving budget item everyone needs to know”

  1. The Money Pie is a great idea. Some really useful tips here that are worth bookmarking. Great advice all round on the blog, money and mental health can very easily go hand in hand.

    Thanks again,


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