Tell me if this happens to you….all of a sudden in a week’s time, like 4 things break and/or need immediate repair. Am I the only one?
This week, we had a outdoor pipe split, the ‘check’ valve on our plumbing go bad (and leak!) and the washer wouldn’t spin. They all required immediate attention!
Let me emphasize the importance of an emergency fund for your family!
Without an emergency fund, you will find yourself going in to debt when these things come up. Cars break down, appliances break, kids need stitches, the roof leaks, you know how it goes.
How to Start an Emergency Fund?
Let’s being with how much money you will need for your emergency fund. One month’s expenditures is a good start. You’ll want to work your way up to 3 month’s bills and then 6 month’s bills.
I can hear you saying “That will take forever to save for!” and yes, it will take a while but that’s ok, just get started.
If you are currently in the midst of paying off debt, you can save for an emergency fund simultaneously. If you don’t, you’ll find yourself adding to the debt over and over again when life happens.
It took us about 3 years to build our emergency fund! It seemed that we would no sooner than get a little money set aside for the emergency fund before the next emergency happened! Frustrating, to be sure, but you know what? At least we had the money set aside to pay the bill and didn’t have to add more to our credit cards.
Funding the Fund
The sad truth about paying off debt is that it must be done with “after taxed dollars” and the same is true for creating an emergency fund. ”Finding money” in your home and budget can be done and may require radical action, as it did in our case, to accomplish our financial goals.
Here are 10 ideas to free up some cash to pay down debt and to begin your emergency fund…
Give up a non-essential ‘treat’ like your daily latte/soda or weekly pizza run. This could easily free up $20 a week/ $80 a month!
Hold a garage sale, purging all the stuff that’s cluttering your house. You’d be amazed how much people will pay for your junk.
Clear your bookshelves and sell them on Ebay – I’m working on this now.
At the grocery, cut your food bill by $10 a week (easy to do!) and put your newly found $40 per month towards your debt and fund.
Don’t eat out! Learn to cook at home and eat in.
Don’t get caught hungry! I’ll cave every time if I’m out running errands and I find myself starving. Packing a water bottle and a sandwich saves the day and the dollar.
Take your teenager’s outgrown clothes to consignment.
Stay out of the stores and malls as much as possible. A dollar here and a dollar there can add up to hundreds of miscellaneous spending!
Turn out lights and turn down the thermostat to save on your electric bill ~ a constant battle for me.
Leave the car in the garage! With gasoline at $3.50 a gallon, I am very careful and strategic about errands. Stretching fill-ups from weekly to bi-monthly can leave cash in your pocket, bigtime.
Little by little, bit by bit, you can create an emergency fund for your family. It takes work but the financial freedom is worth it.
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Great post. Had the fan go out on our furnace the day of the ice storm. Got it fixed quickly but cost us $408.00. Upset yes, but tried to remind myself that you have the money in the emergency fund, that’s why we have it! Last month we had to spend half of our fund. Bummed out but thankful the we had the cash.
Melissa,
Great example! You guys are such good stewards.
Our emergency fund has saved us plenty of times. Thank goodness we have it. We’re a military family and “murphy’s law of deployment” means that whatever you don’t know how to fix WILL break, normally within just a few short of weeks of his departure!
Hey Lisa,
Thanks for sharing that! That always seems to be the case around here, the things that break are the things we can’t fix….oy!
Great post, that seems to be the thing about home ownership, there is always something that’s going to break:) My husband deployed overseas last August and as soon as he left, everything started breaking! It was almost comical. Every time I talked to him he would say, ” what did you break now?” But we had our “fund” and we have extra pay when he’s deployed, so it all worked out:)
Stephanie,
That’s funny, but it’s true….we all hate when things break, but when you have a fund set aside, it doesn’t have to be devastating.
We have had an emergency fund for over 15 years of our marriage. We have less than 1 week’s expenses in there now and it is nerve-racking. We typically have 1-3 months expenses in there. We have just had so many car repairs and some major home maintanence issues in the last 4 months. It is a scary thing to feel so close to going into consumer debt. We have to trust the Lord though. We have cut corner after corner over the years I have been home but it seems like we are running out of corners! If we can’t make it work, we are considering tapping the 401 K even though it is a bad idea. It is just we have no appetite for debt! Thanks for the refresher course!
Hello Trying to make it stretch,
I understand how frustrating it can be when you’ve tried everything and still can’t save what you need.
God is in control and He will provide what you need ultimately. He also honors your effort and desire to stay out of debt. Don’t give up, keep “no debt” attitude! It all works out in the end.