Emergency Fund: Time To “Man Up”

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I dreamt about finances on Friday night, which was odd for me because my dreams typically revolve around a very different subject matter. I’m almost positive the source of my dream was my increasingly frequent thoughts about the status of our emergency fund, and the fact I mentioned them in my roundup post last Friday.

In my dream Vonnie and I were talking to a financial planner who was telling us the same thing I stated in my post on Friday. Each budget period we should set aside a fixed amount of money into our emergency fund and not touch it unless we absolutely had to. We were having this conversation while looking at a calendar.  My wife stated that she understood what the planner was saying, and then pointed at December 25th and said, “So we’ll have money tucked away for Christmas presents, right?” The financial planner scowled at both of us and said, “No, if you want to save for Christmas presents, you cut your spending and save even more.”

At this point I woke up, and started thinking about our finances and how much we really need to build a true emergency fund.

I thought about our most recent failed attempt to fund an emergency fund. I recently received an extra lump sum in my paycheck for submitting an idea at work that will result in a patent application by my employer. It was a great start for an emergency fund. Then the battery in our van needed to be replaced, which we decided constituted enough of an emergency to use some of the funds. Last weekend we went to St. Louis for the Financial Blogger Conference and used the rest of the money so that we could really enjoy ourselves.

We didn’t need to use those funds.

We had enough in our weekly budget to buy the battery when we replaced it, but we didn’t want to have to squeeze something out of our weekend activities. We had enough funds for what we planned to do in St. Louis, but we wanted to have extra funds available “just in case.” We went from “just having the funds available” to justifying the spending of all of it because we don’t get away just the two of us very often.

So again our emergency fund sits at the big goose egg.

So at 3:25am on Saturday morning I challenged myself to do something about it.  From now on as part of our bi-monthly paycheck and bill paying process we will put $100 into our emergency fund. My goal is to have my baby emergency fund at $1000 by the time we complete our debt management program on February 28th. In order to do that, we’ll have to come up with an extra $200 in addition to our now regularly scheduled emergency fund contributions between now and then.  Each Friday I’ll provide an update on the state of our emergency fund as part of my I Love You Like a Blogger Roundup post.

If I miss an update, or it doesn’t increase like it’s supposed to, I expect all of you to give me a big “What’s Up?”

What’s the state of your emergency fund? Are you having trouble building up your fund just as we are?

Will you challenge yourself to build it up over the next 4 months with me?

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36 Responses to “Emergency Fund: Time To “Man Up””

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  1. Fitz says:

    A $1000 emergency fund is baby step #1 in FPU. It’s saved us a number of times and gives a feeling of security to boot. We are pretty strict as to what counts an emergency.

    • Travis says:

      I have heard that, Fitz….and to be honest with you I didn’t understand or agree with it for a very long time. I get it now…oh boy do I get it now. 🙂

  2. The state of my emergency fun is OK but could be a lot better. As a freelancer it’s really the peace of mind I need for slow months, so for me that number is 15k, which I’m about half way there. But I also realize I have other goals and if I just throw everything at the E-fund that won’t leave me anything left for something like a travel fund. It’s such a delicate balance. I’m glad you’re setting that money aside though even though you are still paying down debt!

    • Travis says:

      $1K is definitely just the start for us as well….but we have to start someplace. Although I’m not sure if after $1K if we’ll just start calling it “Savings” or continue the efund. What we call it probably doesn’t matter, as long as we’re saving. Thanks for reading, Tonya!

  3. I’m happy to hear that you are setting aside an emergency fund for when your debt is paid off. I think many people would go have a party after paying off such a large amount (and you should) then start the whole cycle over again. By keeping some money set aside, you are assuring that you won’t get into debt again. We probably have too much in our emergency fund right now, but it helps me sleep better at night. I used to wake up at 3 AM as well and worry how we would survive financially if XYZ happened. I like not having to do that anymore.

    • Travis says:

      Thanks, Kim – we’re definitely having a party, but we absolutely not going back into debt. We’ve worked too hard to get our lives back on track! Having “too much” in your emergency fund would be a problem I would LOVE to have, lol, and I’m looking forward to not having to worry about the “what if” scenarios. Thanks for reading Kim, and it was awesome to meet you at fincon!

  4. Scooze says:

    If you don’t have an emergency fund… how will you pay for emergencies? Do you still have credit cards that you can use? If you’re in debt management, perhaps not. Then the question becomes how you will make a steep co-payment if someone in your family is (god forbid) hospitalized or if your transmission dies or if you have to make a quick trip for bereavement or a family emergency.

    If you have an emergency, how will you pay for it? Would you have to abandon your debt management plan? Incur more debt? Don’t mean to be a downer, but the the consequences could be very real.

    • Travis says:

      You’re not being a downer at all, Scooze, and thanks for the very pointed questions. What would happen is we would go into crisis mode. Cut all spending, delay the expenditure, or even borrow from inlaws….all of these things we’ve done over the last 4.5 years. It’s the thought of these sort of scenarios, and being sick and tired of going into crisis mode that is prompting me to finally do something about it. My wife and I have made a lot of progress in our communication about finances, making and sticking to a budget (with the occasional fail) – but saving money, and not touching it is something we need to yet conquer. The time to do so is NOW – we cannot fully feel secure in our finances until we do.

  5. Travis, I just marked Feb 28 on my calendar. 🙂 And great idea to get going on that emergency fund. I know you’re excited to really grow your savings after that DMP is done!

  6. Petunia 100 says:

    What are your plans for your DMP money in March? Will those payments continue to be made to your emergency fund?

    Congrats on being so close to the end of your consumer debt. 🙂

    • Travis says:

      Great to hear from you, Pentunia 100, it’s been awhile! We have a 14 year old and an 11 year old that we want to provide some assistance for their college education + we have some catchup to do with our retirement savings + bump our monthly discretionary spending just a little bit + keep pumping up that efund. That should just about take care of it. 🙂

  7. Mackenzie says:

    Love your emergency fund plan, Travis! We are all here to cheer ya on 🙂

  8. Monica says:

    I can relate to the struggles of keeping the emergency fund as just that for true emergencies. I’m up for the challenge! Good luck my friend!

  9. I can completely relate to your “Ugh! We blew it!” moment. Sort of like falling off the wagon. Like you, I have trouble not spending money that is readily available. I believe there is huge power in choosing not to spend – especially when the cash is right there. You’ve come so far in paying off your debts; you’ve been building muscle for this next phase of your journey: saving. Good luck! I believe you’ll reach your goal by Feb. 28 : )

  10. Sassy Mamaw says:

    I really enjoy reading your posts, because you are in the middle of doing this and making it happen. I find it hard to relate to someone who has been out of debt for 30 years, etc. You are real, and much easier for people to relate to. It’s gotta be tough posting the ups and downs, but it’s much appreciated!

    • Travis says:

      You just made my day, Sassy Mamaw – comments like yours are the driving force behind what keeps me writing. 🙂 I do find it sometimes difficult putting my mistakes and challenge out there for the world to see..when it’s out in the daylight it becomes very apparent that my financial difficulties are a direct result of my own actions and not something that just randomly happened to me. Writing about it helps me take responsibility for my mistakes, and sets me down the road to correct them. I hope that by sharing, I can get my readers to think about their own situations, and avoid the same mistakes…OR give me advice as to how they may have handled a similar situation. We’re all here to help each other, right? Thanks so much for reading and for the support!

  11. For friends who have trouble starting emergencies, I recommend automating a transfer to a new savings account from each paycheck. Something small like 2-3% that’s pretty unnoticeable but will add up over time.

    • Travis says:

      I like the automatic transfer idea, Stefanie – I haven’t looked into it, but I would bet that my bank offers that service. Great idea, and thanks for the tip!

  12. We’ve all been there, Travis.. You just need to lay low for a little while in order to build it back up. No harm, no foul 🙂

    • Travis says:

      Laying low will definitely help me build it back up…and I’m 100% AOK with doing so. I go full throttle (and then some) during the week, and I really need the weekend to let up on the gas a bit. That being said, it’s the leaving the efund alone and not spending it once we get it built up that will be the real challenge. Thanks for stopping by, Jefferson !

  13. Cait says:

    I’m totally stalking your emergency fund progress from now on. Since you’ve kept everyone in line w/ #pfworkouts, I’ll do the same for you w/ this! 😛

  14. Stacia says:

    I just started reading here again (It’s time to “woman” up) and in 4 months, actually starting Jan – April, I’m going to complete the $1000 savings fund and start working on paying of $10K in debt that I have. I plan on having this done within 12 months. 🙂

    • Glad to have you back, Stacia – hope to hear from you often! Good for you on putting your foot forward to get that Efund going and then kick your debt to the curb. Stop by for some tips and motivation and to let us know how you’re doing!

  15. Interesting how very detailed that dream was, Travis!!! We just got a similar feeling that we need to buck up and start ours as well. Given we have a super high DTI right now, it won’t be easy, but like you guys, we’re just going to have to “man up”. 🙂

    • I don’t remember my dreams often, Laure, but when I do…..look out. LOL. Maybe it’s the holidays, or maybe it’s something in the air, but Emergency Fund Fever seems to be hitting a lot of people lately. Looking forward to hearing updates on how you’re doing with yours in the coming months!

  16. Brent says:

    Great job on “manning up” and working on an emergency fund. They are great tools to avoid high interest credit card debt in a crunch.

    I try to encourage people who have the big fat zero in their eFund to start putting away $1/day. Hey, $30/month is better than nothing and getting started is usually all people need to see that you can build up a nice little eFund quickly with regular contributions.

    Good luck!

  17. Awesome! I really need to hunker down and build my EF, too. But once I get a good chunk of money in there, I can’t help but think that it would be best to apply it towards my debt! I really need to not touch it.

  18. hannah says:

    An emergency fund is so important for peace of mind and good finances. We have been forced to use ours so many times!
    Right now we are short on money, with my spouse in graduate school, student loans, and several thousand dollars worth of medical bills. But we still have that baby emergency fund, and I resist touching it at all.
    Leave it alone, and let it be a bit of a ‘security blanket’. It will serve you well.

    • Travis says:

      Excellent work, Hannah – and I’m glad you mentioned that you have medical bills, and money is tight….yet you REFUSE to touch that emergency fund. It’s imperative to have one to be able to keep keep a handle on your finances. Thanks for sharing your personal situation, Hannah!

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