Financial conversations: How to create an emergency fund

By Dr Lindsey Appleyard and Professor Sally Dibb

As the second wave of the coronavirus rolls on, households are facing mounting financial pressures. Increasing numbers of people are losing their jobs and incomes are becoming ever more squeezed.  With extra Winter heating costs and Christmas spending to contend with, many will be concerned about their money. Yet despite these worries, talking about money is often taboo, with many people reluctant to discuss their financial situation even with their loved ones.

Evidence shows that early financial conversations can help individuals to understand their financial situation and give them the right tools/support to boost their financial wellbeing.   So why do people find it so difficult to talk about money and how can they be supported to be more open and have more positive discussions about their finances?

Our new research with experts in financial wellbeing and the public has shown that people commonly struggle to talk openly about their money and actively avoid situations that force them to do so. People often worry about discussing how they manage their finances, due to the emotions that money brings up, such as shame or embarrassment.

One key finding was that providing information at ‘teachable moments’ offers the best opportunity to engage people to take action. Teachable moments are a point of transition or change in our lives that enable us to take beneficial action. Examples include when we move home, lose our job or if we are expecting a baby. At these points in our lives, we are more likely to take stock of our financial situation and reflect on how we can use our money to better effect.

We also found that it works best when these conversations take place with an individual who is able to listen carefully, empathetic with someone’s situation and is trusted. Even if this individual does not have all the right answers, they can often signpost to other sources that might be able to help. 

Talking about your finances should not involve blaming yourself for your spending. It is about understanding your own specific situation and your priorities or goals to find the best way to achieve them, such as paying off debts and starting to save.  You can find independent, free organisations that can help listed at the end of the article. Our research also found that people want to know the simple, actionable steps they can take to help achieve their financial goals. For example, the uncertainty of Covid-19 has shown that many people would benefit from having a few months’ expenses saved in an emergency fund.

Saving for an emergency fund can be made easier with these tips:

  • List your income and outgoings to create a budget, so you can work out how much you can save regularly. This budget will also help you find out how much you need to save to cover each month’s expenses.  A budget planner is available to help you on our free-to-use MoneySkills app:
  • Save as soon as you are paid, so you are less tempted to spend it.
  • Open an easy access savings account so you can use your savings for emergencies if and when you need to. Putting your savings into a different account from your current account also acts as a buffer to dipping into your savings.
  • Think about your spending habits and what could be driving those behaviours. Do you go online shopping after receiving marketing emails telling you about special offers and sales? Or perhaps you spend too much on takeaway food or coffee shop drinks? If so, you can take action to reduce your spending, perhaps by unsubscribing from marketing emails, deleting takeaway and shopping apps from your smartphone, or by taking your own coffee to work.
  • Put at least one day a year aside to review your direct debits and standing orders.  This review will help you spot where you can save money.  For example, do you have the best deals from your current utility suppliers? Are you paying too much for motor, house and travel insurance? Are their regular payments going from your bank account to cover services you no longer use?
  • Are you working at home at least one day a week since the pandemic? You could apply for a whole year’s tax relief of £60 or £125 depending on your tax rate. Apply online at:

Focusing on these sorts of small changes can all add up to make a big difference that helps you reach your money goals.

Talking openly about your finances with others can point you in the direction of workable solutions that can make a difference to you, that will help prepare you for the uncertain times ahead.

If you are worried about money and debt, for free, independent advice you can contact:


Dibb, S. Merendino, A. Aslam, H. Appleyard, L. Brambley, W. (2020) ‘Whose rationality? The messy reality of financial decision-making and what it means for policy and practice’. Journal of Business Research  

Brambley, W. et al. (2019) Managing My Money for the Just About Managing. Open University and Coventry University.



Tomas Allum