Build a time emergency fund

How to feel less overwhelmed

If you read a lot of personal finance literature or listen to personal finance podcasts, you’re probably familiar with the concept of a monetary “emergency fund.”

Life happens. When it does, it can be expensive. An emergency fund is easily accessed cash that can cover an unexpected car repair, a broken pipe, or anything like that. These things fall in the category of “known unknowns.” You don’t know exactly what unexpected expense will arise, but you can be pretty sure something will happen.

Having savings means you can absorb the expense without going into debt. This is why Dave Ramsey, for instance, advises that even people with significant high-interest debt save $1000 as their first step toward financial stability. That baby-steps emergency fund keeps people from going deeper into the hole.

Time and money

There are many parallels between time and money. I think this is one area where seeing parallels can lead to good choices. Good time management means creating the time equivalent of an emergency fund.

This is easily accessed time that you can deploy when something unexpected happens. If you have this open time, then an emergency means you don’t need to “borrow” time from other priorities. You have a place for the emergency to go.

One of the best ways to create such a fund is to avoid scheduling things for at least one multi-hour block somewhere in the week. Friday afternoon is a common choice, as it tends not to be anyone’s peak productivity window. If nothing goes wrong during the week, great! Quit early.

But more likely, your week will go something like this. Your biggest client, whose project is due Thursday, will call on Wednesday morning with some additional requests. This means that anything non-urgent that is scheduled for Wednesday will need to move. If Friday afternoon is open, it can go there. You’re still on track! You end the week accomplishing exactly what you hoped to. But if Friday afternoon is already packed, as is every other minute of your week? Then you start having to borrow time from future weeks, which are equally packed. That’s when the time debt starts to add up, and people feel overwhelmed.

The disappearing fund

Of course, there is one big difference between time and money, which creates a challenge with this practice. A financial emergency fund is there unless you spend it. Indeed, if it’s in an interest-bearing account, it will keep growing.

Even the wealthiest person, however, will see his time emergency fund disappear once those minutes are in the past. You can’t cash in time now (with interest!) from a low-key week you experienced in 2005. You have to build your time emergency fund again and again.

But there are still some ways to create a more renewable emergency fund. For instance, you can bank time with other people. Humans are a social, reciprocal species. That’s a fancy way of saying that if you do a favor for someone, there’s an extremely good chance that this person will do something nice for you if you ask. Not everyone, but most people.

So, whenever you’ve got a little extra capacity, reach out to your colleagues and see how you can help support them. You can do this in your personal life too. If you’ve decided to take a school holiday off because you don’t have a good childcare option, see if your neighbors or your kids’ friends need supervision that day too.

You’ve banked favors. And now, when your big client has last minute requests, your colleague happily covers your Wednesday meetings for you. When you need last minute childcare, your neighbor is happy to take your kids. You’ve built a time emergency fund, and you’re still on track.