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Emergency Funds & Avocado Toast Thumbnail

Emergency Funds & Avocado Toast

For those of you that do not know me, I am the youngest employee of the Rappaport Reiches Capital Management tribe and… the only millennial. I understand that word “millennial” does not always come with the best of connotations. Millennials are presumed to be self-absorbed, addicted to their phones and social media and, most famously, ready to trade in their ability to buy a home for a daily oat milk latte and avocado toast. I find myself trying to fight these generational presumptions, particularly by trying to be smart with my saving and spending habits.

So, how is it that one starts to spend less and save more? Here are some of the best methods I have come across that have helped me: 

1.    Prepare a budget and see where your funds are being allocated. Are there expenses that you can cut back on? Can you start cooking from home instead of eating out (see Shari for tips on this)? 

2.    Set up an automatic savings plan. Based on your budget and discretionary income, decide on an amount that will automatically be transferred into a savings account every time you get paid. Just set it and forget it. 

3.    If you receive a raise or a bonus, try to set a portion of those funds aside to help build your emergency fund. Yes, you have worked hard for this extra money, and yes, that trip to Italy may seem like an emergency (especially after this past year), but be prudent and save as much as you can. 

4.    While studying for the CERTIFIED FINANCIAL PLANNER exam earlier this year, I learned that the benchmark for an emergency fund is to have approximately three months (possibly more if you have young children) worth of expenses in a savings account / easily accessible account. Once you reach this benchmark, then you should go to Italy. All jokes aside, once you are comfortable with the amount of savings you have accumulated, continue to put aside money in investment and retirement accounts. 

As we find ourselves in the middle of a pandemic, when so many people have lost their jobs, been furloughed or have hours reduced, it has become even more evident that building an emergency fund is a necessity – whether you are a millennial with awful spending habits or not. And I won’t lie, I do enjoy avocado toast as much as the next millennial, but coming to the realization that spreading avocado on toast can easily be done at home was a step into adulthood and a step forward in the money saving process. 

Rhea Ravindran, CFP®

Rhea is a Senior Client Associate at Rappaport Reiches Capital Management.  Please connect with her below.  She loves to talk about investing, financial planning, and her favorite movies. 


The author does not intend to provide investment, legal or tax advice as these materials are for general educational purposes only.  Please consult your legal, tax or investment professional for advice on your particular situation. This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not guaranteed. It is not intended to be a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results. Please refer to RRCM’s Form ADV Part 2 for additional disclosures regarding RRCM and its practices.