The 10 Percent Safety Net

Shanta Lee

David’s pacing the kitchen, phone glued to his ear, and you can just feel the tension radiating off him. “Okay... okay, I understand. Just email me the estimate.” He hangs up, and you know it’s not good news. “That was the mechanic. The transmission on the SUV is shot. It’s going to be almost six grand to replace.” And Lisa, she’s at the table, laptop open, and you can see her face just drop. “Six thousand? Where are we going to pull that from right now? We just paid the property taxes, and didn’t we book those flights for mom’s birthday?” That’s the moment—the one where your stomach drops and you think, “How are we supposed to handle this without derailing everything else?” And honestly, I see this all the time, even with couples who are earning well into the six figures. It’s not about how much you make; it’s about how prepared you are for life’s little—or not so little—surprises. That’s where short-term savings come in. This is the first slice of your powerful 30% allocation, and today, we’re going to break down exactly how that 10% can be your financial shock absorber. Think of it as the fund that keeps your bigger plan on track when life throws you a curveball. It’s not just for emergencies, either. This bucket is for all those things you know are coming—property taxes, home repairs, insurance premiums, maybe even a new car or a special trip. It’s also for those “life happens” moments: the furnace dies, the roof leaks, or you’re between jobs for a month. And, if you’re lucky, it’s your opportunity fund—cash on hand to say yes to something amazing, without sabotaging your long-term goals or racking up debt. So, if you’ve ever felt that familiar panic when an unexpected bill lands in your lap, you’re in the right place. Let’s talk about how to make that feeling a thing of the past.

Shanta Lee

Hello, and welcome to the Twogether Money Podcast, a place for high-income couples who wonder where it all went. My name is Shanta, and as a retired financial advisor with a counselling diploma, I'm here to help before it's too late.

Shanta Lee

Now, before you start dreaming about that kitchen renovation or booking that European vacation, there’s a non-negotiable first step: building your emergency fund. I know, I know—everyone talks about emergency funds, but there’s a reason for that. This is your ultimate safety net. I always say, aim for at least three to six months of your true living expenses—just the essentials, not the extras. This isn’t about padding your lifestyle; it’s about protecting your foundation. And here’s the thing: you want this fund fully stocked before you start earmarking money for other short-term goals. I’ve seen couples try to split their savings between too many things at once, and it just waters everything down. Focus your entire 10% allocation here until you hit your target. Let me give you a real example—Mike and Jenna. They had a $1,500 surplus in their 70% living expenses bucket, and their 10% short-term savings was $2,000 a month. Instead of spreading that out, they funneled both into their emergency fund—$3,500 a month—until they hit their six-month target of $60,000. They got there way faster, and the peace of mind? You can’t put a price on that. But what actually counts as an emergency? Losing your job, a medical crisis, a major home repair—those are the big ones. Not, you know, your favorite designer having a sale or the latest tech gadget. I always laugh because, honestly, I’ve had to talk myself out of that one a few times. But seriously, knowing you have this buffer changes everything. It’s not just about the money—it’s about the emotional security. You can breathe easier, sleep better, and make decisions from a place of calm instead of panic.

Shanta Lee

So, where should this money actually live? This is crucial—your short-term savings, especially the emergency fund, needs to be safe and accessible. This is not the place for risk. No stock market rollercoasters, no crypto adventures. The goal here is preservation and accessibility, not growth. I always recommend a separate high-yield savings account—online banks usually offer much better rates than the big brick-and-mortar ones, and they’re still insured. Money market accounts are another good option. The key is to keep it separate from your regular checking account, so you’re not tempted to dip in for non-emergencies. And here’s the magic word: automate. Treat your 10% short-term savings just like any other bill. Set up an automatic transfer every pay period or month, so you don’t have to think about it. Don’t rely on willpower or memory—pay your future self first. I remember working with a client who, honestly, hated the idea of “saving.” But once we set up automation, she started to see her balance grow without even thinking about it, and suddenly, she found joy in protecting her future self. And let’s talk about James and Priya. They got hit with a $5,000 car repair out of nowhere. But instead of panicking or reaching for a credit card, they just calmly transferred the money from their emergency fund. It was an inconvenience, not a crisis. That’s the power of preparedness. It’s not about never having problems—it’s about having the tools to handle them with confidence.

Shanta Lee

Now, just because you’ve set up your short-term savings doesn’t mean you can set it and forget it. Life changes, inflation creeps in, and your needs evolve. I always tell couples: set a calendar reminder—twice a year, just like a dental checkup—to review your savings targets and transfer amounts. Are your living expenses higher now? Did you get a raise, or maybe your income dipped? Adjust your 10% allocation accordingly. If you get a bonus or a tax refund, consider using part of it to top up your emergency fund or accelerate your next goal. And if you ever have to dip into your emergency fund—because, let’s face it, that’s what it’s there for—have a plan to replenish it. Maybe it’s funneling your next bonus, or temporarily increasing your savings rate until you’re back at your target. The point is, don’t let that buffer stay depleted. I’ve seen couples let their emergency fund run low for years, and it just adds this low-level anxiety to everything. Keep it topped up, and you’ll always have that peace of mind in your back pocket.

Shanta Lee

Once your emergency fund is solid, you can start using your 10% short-term savings for bigger goals—like a home renovation, a new car, or your child’s education. The trick is to get clear on what’s coming up, how much you’ll need, and when you’ll need it. Create a timeline for these expenses, and adjust your savings rate if you need to. Maybe you take on a side gig for a few months, or temporarily cut back on some extras, just to hit your target faster. The beauty of this approach is that you’re not sacrificing your long-term security for short-term wants. You’re building towards your goals in a way that feels intentional and empowering. And honestly, watching that balance grow—knowing exactly what it’s for—can be really motivating.

Shanta Lee

So, take a look at your upcoming expenses, make a plan, and remember: this is about creating a life that feels rich, not just looks rich on paper. That’s it for today’s episode. Next time, we’ll dive into the second 10% bucket and how to use it to accelerate your long-term wealth. Until then, keep building your safety net—and your dreams—together.

Shanta Lee

If this resonates with you, and you'd like to learn more, visit my website at TwogetherMoney.com. That's T-W-O gether money, like the number 2. And here's a fun fact: it's the only place where you can purchase my books, so get those fingers moving and I'll see you over there!