This post is sponsored by CIT Bank.
If I have one goal in this lifetime, it is to help women see the connection between their financial security, and their personal power.
When you have a strong income and earning potential, you make better decisions about your romantic relationships — dating men not who will pay your rent, but men who rock your world.
You can leave abusive or even unsatisfying relationships because you worry you can’t make it without his paycheck. If you have money in the bank, and confidence in paying your bills now, and your future later, you are more likely to make sound career risks, and less likely to stay in a crappy, miserable job.
When you have your financial act together, you are more confident, less stressed mom — because you know that what life throws at you, you are more likely to handle with ease.
I LOVE checking my savings accounts daily. Just looking at that cash sitting there, with nowhere to go but to my own sense of security, makes me feel very confident in pretty much every aspect of life.
I swear, to you this: between that money and daily use of coconut oil, my skin stays zit-free and glowing. FACT.
Unfortunately, most people — moms in particular — don’t have cash savings. In fact, a Bankrate survey found that just 39% of Americans have at least $1,000 in savings. Ideally, you have 3 to 6 months savings in cash, separate from your bank account, that you can turn to in the event of an emergency (36 reasons to consider, below!).
How moms can quickly build a $1,000 savings account
Cash savings in the bank is a huge step in this direction, especially with a solid interest rate. I’ve parked cash in CIT Bank, an online, FDIC insured bank, because it offers the highest rate I’ve found.
CIT pays 2.15% APY on deposits of $25,000 or more, OR less than that, but with monthly deposits of $100 or more. See site for details and disclosures. This is the highest savings rate I have found!
I love the CIT Savings Builder program: Even if your savings are low, there is a really great, positive incentive to save regularly. Set up those auto-deposits and watch your savings grow, ladies!
Good feels and smooth skin aside, there are countless practical reasons why every mom needs at least $1,000 in savings. Here are some that members of my Millionaire Single Moms facebook group suggested.
Why you need $1,000 minimum in a savings account
- Dental bills. I got hit with a $182 bill unexpectedly and had to pay before I left the office — Lakeshia
- Broken air conditioner in the middle of a scorching summer. — Maria
- Furnace goes out in the middle of the coldest week of January. — Sabrina
- Deductible if you make a auto or homeowner’s claim. — Michelle
- Kids can’t fly despite what they may believe. — Vanessa
- Fat fingers in HR messes up your direct deposit so you don’t get paid on time. — April
- Car repairs. — A lot of moms
- Including new tires. — Shana
- Summer camp/daycare expenses you weren’t expecting. — Amy
- Unexpected sports/club related expenses for the kiddos. — Candace
- Your checking account is hacked and frozen, and you still need to eat. — Tiffany
- Unexpected legal expenses! We were surprised when we were taken to court for grandparent rights and visitation. Completely blindsided and never expected. — Mariah
- You need to flee an abusive situation and have zero family to help you. Laura
- Mice in the crawl space. — Dara
- Sick days when you don't have paid ones or you're out of them. —Cassie
- Jury duty making you unable to work/earn money. — Monique
- Appliance purchase or repair (dishwasher, water heater, washer/dryer, fridge, stove, oven, microwave. —Aimee
- Death or illness of a loved one who lives in another state requires airplane tickets. — Theresa
- You have a family emergency and need child care. — Ivy
- Storm takes out the neighbors tree that lands on your roof, and though insurance will cover it eventually you need someone to come at least do something to keep the water from pouring in. — Sabrina
- Natural disaster, hurricane, tornado, earthquake. — Olga
- If renting and you have to suddenly move you probably need a chunk of change before you get back the security deposit on the old place. — Monica.
- Deposit if you want to switch daycares. — Sarah
- Because it’s hers. I know that sounds facetious; however, the concept of “my” money got lost somewhere in my marriage and losing that ownership meant I lost some of my power and control over things that mattered to me but not him. Having your own savings account means you have some money to take care of things by yourself. — Lakeesha
- Unexpected professional opportunities that pop up and have costs associated with them. — Loren
- [Adds Karen:] Agree. Many companies will foot the plane fare if they have a travel office, but you will have to pay upfront for hotel and incidentals and get reimbursed upon completion of trip.
- Shit. Just shit that happens. Inevitably. — Kenyette
- I call it my Holy Shit Fund. — Beth
- Unplanned medical issue for a pet. — Ivy
- When the reliable child support check doesn’t come in like it usually does. — Sherry
- If you lose your job. — Ivy
- When you run into your ex-husband's garage door because you forgot to put the car in park! Wow… — Amy
- Spike in electric or gas bill. — Ivy
- My dog ate a tampon last week and needed exploratory surgery. $3k later, I was glad to have the ability to pay without having to make some sad choices. (I also had to invest in trash cans with lids after that little incident…) — Elizabeth
- Your purse gets stolen. — Ivy
- You need to be able to depend on YOU! — Neka
- Because you're a grown-ass woman and deserve to have and feel the power of financial security! —Me
How about you? Are you ready to build your $1,000 emergency fund? Sign up for the highest rate I've found, with CIT Bank now
Already have your cash fund? CIT is still the highest rate I've found. But if you're ready to take it to the next level and start investing, read How to start investing for women.
Here is some advice from a divorce lawyer about why it is so important for married moms to have their own cash savings account:
The following is a guest post by New York City divorce lawyer Morghan Richardson
Every married woman needs at least $5,000 in a bank account in her own name – no matter what her husband thinks.
Far too many women are going to reject this mandate as an act of marital treason. Let's be clear: I didn’t say the account had to be a secret. I leave that up to the individual woman. Nor did I suggest that you shouldn’t care what your partner thinks. In a healthy relationship you should absolutely care about his opinion. But you should have an account, regardless.
Having your own money is part of being an adult
You’re an adult. You should have some access to cash in your own name, not because it is a “divorce slush fund,” but for scads of other reasons. Having your own money to budget and spend is part of being a grown up. It should be there for emergencies — what if he dies and the joint account is frozen (it happens all the time)? It should also be a place from which you can spend on the occasional luxury or other expense without having to explain every nickel to your husband. What if those fabulous patent leather Jimmy Choo platforms that happened to be on sale? Or your brother is in (another) jam and asks for help? Money affords you options — even if you don't believe you need some of those options right now. That feeling is empowering.
Should married women have a ‘divorce fund'?
But should your account indeed be a “divorce slush fund”? Maybe. I don’t need to throw a bunch of grim divorce rate statistics at you. If you live in this world, you already know. So let’s get real:
An account held jointly in both spouses’ names can be accessed by either person. If your husband drains the account, a judge may require he pay you back some of it. But that can take months or even years. What will you do until then? How do you hire a lawyer to make him pay it back? How do you pay your bills and feed your kids? He may not pay child support or alimony unless that same judge requires him to do so – again, this takes time. How will you make it?
The vast majority of people who come into my office (all of whom are there to get divorced) have an arrangement in which one partner handles the all bills and budget, and the other is oblivious to the family’s income, investments, debt and spending habits. This arrangement didn’t make for a happy union – these couples are divorcing, after all. You don't have to guess which spouse gets burned in the divorce.
No one sets out to get a divorce. No one sets out to have a car accident, either. But sometimes the minivan gets wrecked, and thank God you have insurance, right? So insure yourself. Get an account for all of the harmless reasons, but also know deep down that you have insurance if your marriage fails.
Having your own money is healthy for your marriage
Another thing: opening an account may serve as a pulse-check for your marriage. If your marriage is open and strong, then why would your husband have a problem with you having your own money? If you feel it is out of the question to even mention such an account to your husband, then you probably need your own funds more than you realize. Does the topic make you nervous? Because turn-about is fair play: I suggest he have an account in his name, too. And maybe he already does.
True story of a mom who secretly saved and get out of an abusive marriage:
I know an amazing mother of four children. She is on her second marriage and this time, the marriage is extremely successful. She and her caring, supportive husband are both school teachers. They have two-year-old twins and a house with – literally – a white-picket fence around it. It wasn’t always this way.
I’ll call this woman “Anne.”
Anne’s ex-husband was an obsessive, controlling and verbally abusive police officer. He drank. He cheated. And when Anne protested, he threatened to use his job to take custody of their preschool-aged kids and make her life a living hell. He also threatened to use his position as the sole bread-winner to hire the best lawyer and steam-roll over her in court. Yet, rather than feeling trapped and overwhelmed, Anne seized control of the situation – by taking control of her finances.
But not in the way you might think.
Morghan Richardson is a family and divorce attorney and mediator in New York City. She juggles her Queens-based law practice with her other job as the single mom of two preschool-aged boys, Hayden and Ozzie. Her firm is Richardson Legal, PLLC.
CIT Bank FAQ
Q: Is CIT Banki legit?
A: Yes. CIT, the parent company has been around for more than 100 years, mostly as a commercial lender, and has more than $50 billion in assets. The bank is FDIC insured and offers mortgages, business, and commercial financing, CDs, money market accounts, IRAs, and custodial accounts. The bank was named a Forbes Best Employer, and its savings accounts recognized by Nerdwallet, Bankrate, and others.
Q: Is this savings account really a good deal?
A: Yes. Check out the highest savings account rates on this post.
Q: How easy is it to withdraw my money from a CIT account if I need to?
A: Withdrawals can be made via electronic funds transfer (ACH) or outgoing wire transfer (there's a $10 fee for accounts with balances less than $25,000). There is a limit of six pre-authorized or automatic transfers or withdrawals, electronic banking transfers to other accounts or similar per statement cycle. Withdrawal and transfer requests submitted by mail do not count toward the limit, nor do withdrawals requested by telephone if the funds are mailed to you in the form of a check.
Q: How can I make deposits to my account?
A: Deposits are unlimited and can be done via online funds transfer (ACH), incoming wire (no fee charged), or by mailing a check.
Start saving with CIT now!
Some of the links in this and other posts generate a commission. I never recommend products that I don’t truly believe in. Seriously – I get asked to write about stuff all the time and turn down hard cash if I’m not feeling it.
Emma Johnson is a veteran money journalist, noted blogger, bestselling author and an host of the award-winning podcast, Like a Mother with Emma Johnson. A former Associated Press Financial Wire reporter and MSN Money columnist, Emma has written for the New York Times, Wall Street Journal, Forbes, Glamour, Oprah.com, U.S. News, Parenting, USA Today and others. Her #1 bestseller, The Kickass Single Mom (Penguin), was named to the New York Post's ‘Must Read” list.
Emma regularly comments on issues of modern families, gender equality, divorce, sex and motherhood for outlets like CNN, Headline News, New York Times, Wall Street Journal, Fox & Friends, CNBC, NPR, TIME, MONEY, O, The Oprah Magazine and The Doctors. She was named Parents magazine’s “Best of the Web,” “Top 15 Personal Finance Podcasts” by U.S. News, and a “Most Eligible New Yorker” by New York Observer.
A popular speaker, Emma presented at the United Nations Summit for Gender Equality. Read more about Emma here.