Do you need an emergency fund?

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The simple answer is yes.

One time, in not so many words, I shared that I wasn’t the biggest fan of the Dave Ramsey plan. I did read Dave’s Total Money Makeover (along with tons of blogs on his plan), and I do think it has its merits and works well for a lot of people. It just never felt right for me. One thing that I did take away from Dave, and that I do strongly believe in, is having an emergency fund.

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In Total Money Makeover, Dave Ramsey talks about what he calls the “Baby Steps” and Baby Step #1 is having a $1000 emergency fund set in place. Then the idea is that after you are debt free, you have an emergency fund that would cover 3-6 months of living expenses for you. The whole idea behind this is that if something unexpected happens, you have the money and don’t have to go further into debt by putting it on a credit card or taking on some kind of loan. After you’ve paid for the emergency you’re then supposed to replenish your emergency fund as quickly as possible.

It makes sense.

Last week (as I’m writing this) I got into a car accident. No one was hurt and it totally wasn’t my fault (I was rear ended by a distracted driver). After dealing with the police I called my insurance to figure out what to do next. I made the decision to go ahead and let my insurance cover the repairs. They told me they would then get the money reimbursed from the other insurance company. I opted to do this because I knew my car will get all the repairs it needs, and it would probably be done quicker this way. The downside is I may have to pay my deductible (unless my insurance gets paid by the other insurance company before the repairs are done). 

This situation was unexpected and with it is came an unexpected expense. But I have an emergency fund and I can cover my deductible if I need to. And once the insurance company and I are reimbursed, that money is going right back into my savings. 

If I didn’t have an emergency fund, I would probably end up putting the deductible on a credit card. I’d probably ecru some interest before I was reimbursed, and when I was reimbursed, I’d find some reason to not put the entire amount of money towards the credit card. On top of that, the interest would continue to grow. 

How do you build an Emergency fund?

When I decided I needed to have an emergency fund, I built it through a tax refund and putting whatever I thought I could spare out of each paycheck into my savings, even if it was only a few dollars at a time. 

I could have probably saved money quicker than I did. But I hadn’t specified any amount to myself, so I just threw whatever I had into my savings after spending too much of my leftover income on frivolous things. I now save at least 10% of my paychecks. Figure out your necessary expenses, then see how much is left. You can put a specific dollar amount on it (like saving $100 of your 9-5 income each month) or do a percentage like me. 

If you want to come up with the money faster, try this

Sell stuff: Most of us have stuff lying around that we’ve been meaning to sell, or just need to get rid of. Why not sell the stuff now and put the money towards your emergency fund? Have a yard sale, try craigslist, or post on a local Facebook group. You’re sure to get some cash which will serve you a lot better than your old junk. 

Ebates: I love using Ebates, especially with their browser extension. If you’re going to be shopping anyway why not use a program like Ebates to earn cash back? It seriously is free money

Pick up a side hustle: I prefer a side hustle that I can do from home, in my pajamas. So something like blogging, making stuff to sell on Etsy, or working as a virtual assistant is more my speed. But maybe you’re more of an on-the-go person. Picking up a few hours a week working retail or waiting tables could be for you. 

Keep in mind you don’t have to work multiple jobs. I’ve been in the position of feeling worn out from my normal full-time job that the thought or working an extra day a week or after I get home from work just seemed like too much. Don’t spread yourself too thin just to get to your savings goal a month sooner. 


Related: Save Money Without Even Trying


Hopefully I’ve shown you the importance of having an emergency fund, and that you now feel like you can build one yourself. 

Do you have an emergency fund already? If so, how did you save for it?


Yes you really need an emergency fund! Here's a real life example and easy ways to save your money.



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  1. 7.18.18
    Nkem said:

    An emergency fund is imperative! I’ve only started building mine this year and it has put me at ease a lot because you never know what the future holds! Great post!

    • 7.20.18
      Emily said:

      Thank you! Good luck with your saving!