Many of you know that we are in what Dave Ramsey refers to as Baby Step 3 (Saving a 3-6 month Emergency Fund). In many ways it feels like we have been in Baby Step 3 FOREVER people. Especially for the amount of debt that we were able to pay off so quickly ($127K in 4 years).
It does help me to remember that:
- We paused our process to purchase a few things we needed. WOW our towels were really, really holey and not in a sacred way.
- Our income significantly decreased last year (probably the lowest we had seen it in years) due to a lack of business.
- Our giving increased exponentially last year after we were debt free.
- We went on Debt Free Vacation in October which was wonderful.
And we are about 75% of the way to our goal. Or we *were* until this week.
We have a minor-ish setback and it looks like ~14% of what we have saved is going to be used for, well an emergency. 14% doesn’t seem like much but let’s say it would have wiped out our Baby Emergency Fund of $1000 and then some and then some more and then some more. *sigh*
Why, oh why, is it SO hard to spend your emergency fund when you have an actual emergency? I guess it’s a good thing that we aren’t quick to part with what we’ve worked so very hard to save. If it weren’t hard, we’d be considering our current wardrobe a fashion emergency (which it probably is but we dare not touch the emergency fund for it).
Here’s what I do know. Stuff happens, Money Saving Lords and Ladies.
Your water heater goes out.
Your kid needs braces.
Your car blows up.
Your car blows up again.
You need a root canal.
*oh, did I mention all of the above happened when we were paying off debt from 2008-2012?*
Before you ever begin paying off debt, you MUST have at least $1000 saved for emergencies (of the non-fashion variety). It’s the nature of being human. Something is just going to break. And when it does, you have a safety net. It’s not any easier to fall but at least you won’t hit the ground and shatter.
Is it hard for you to part with an emergency fund even when you have a real emergency? Why or why not?
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Eek! But you sound like you realize it and accept it, in that emergencies happen and we just have to get through them. We had another small-ish emergency come up that had to come out of our savings. It’s hard for all the reasons you mention. I appreciate you sharing that as it just reminds me I’m not the only one out there!
I always get irritated when we’re thrown off track, but the older I get, the more I roll with it and the less surprised I am. Emergencies are never fun, but I’m always grateful to have the resources to take of things, even though it throws off ‘the plan’.
This year we are making a solid effort to get on track. We have started our emergency fund off strong, but it’s going to take time to build the rest. IT is really hard to spend that, which I think is the point. It really makes you evaluate if it’s really an emergency (P.S. we did have the full starter emergency fund [$1000] set aside, but then the truck broke…so yeah…)
Yes! This step takes FOR-ever. You would think it would be more exciting, seeing the money add up, but I guess knowing it’s for less-than-wonderful circumstances makes it hard to get pumped about socking the money away. I will take boring any day, though. Our emergency fund had not only helped us through minor emergencies, but it brought us through whole to the other side of unexpected job loss and major medical bills.