Up A Creek Without A Paddle

The importance of an emergency fund

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Photo credit: Jilbert Ebrahimi on Unsplash

You probably hear it all the time – you need an emergency fund!

Maybe you’re thinking, how am I supposed to find room in my budget for an emergency fund when I can barely cover my regular bills?

Well, the honest truth about it is, if you don’t find some room in your budget to save for emergencies, you might be up a creek without a paddle, when an emergency does come up.

And trust me, they will. Especially if you own something. 

Have a house? You might need to replace your whole HVAC system or have a water leak that goes from the second story into the basement.

Have a car? Ever thought about replacing that timing belt or needing new tires? Because those will happen.

Have a pet? Your cat might need emergency dental surgery next week.

Have a phone or computer? What about when you drop your phone and destroy the screen? Or your cat spills a drink all over the keyboard to your laptop?

Unfortunately, all of these things have actually happened to me!

Fortunately, I’ve been building my emergency fund for years now.

Is it the amount I want, long-term? Nope. 

Am I saving consistently into it? You betcha. 

A common question I get is how much should I have in my emergency fund? While the end goal for an emergency fund is 3-6 months of living expenses, that can be a daunting number to begin with when you are starting at zero. What if, instead, you made your first goal $500? Even that will give you more of a buffer than having nothing at all. 

Will it cover all of your living expenses for a month or two if you lose your job? No. But it’s a starting point. And being able to achieve a goal, no matter the size, will give you more motivation to keep moving forward. Once you achieve that goal of $500 you can up it to $1,000. And so on until you have a nice cushy emergency fund just sitting around, waiting for the day you need to use it.

Can you find $100 per month to tuck away? If so, you’d reach your $500 goal in 5 months! Again, it’s not the end goal but it’s more than $0!

Also remember that small dollar amounts add up too! $5 this week and $15 next week is still $20 you didn’t have saved before! And before you know it, you’ll have hundreds of dollars happily sitting around waiting for the day you’ll eventually need them.

Start saving today! Future you will be glad you did!

Ready to get started?

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