When Chaz and I started honing in on our finances and had made the decision to start investing our money instead of just saving, one of the things we had to decide on was whether or not to have an emergency fund or just throw all of our money into our investments. We also had to decide how much to keep in it and when do we dip into it. I was pretty set on having one and keeping a fair amount of money inside of it, and Chaz was in agreement.
What is an “emergency fund?” An emergency fund is simply a savings account that you keep stocked with enough money that it will pay your bills for about six months if both you and your spouse were to lose your jobs. It can also be used for actual emergencies like medical or dental bills, new water heaters or tires, anything that you didn’t see coming that needs to be paid for.
When we were deciding how much to save and keep in our fund, I was definitely wanting to go on the side of more rather than less. I wanted to have enough to save us from emergencies and also to keep us afloat if we somehow lost all of our income streams. (Basically if the zombie apocalypse came we’d have money stock piled for supplies.) As Chaz was floating on the side of less, we compromised by meeting in the middle. We had just started investing our money in other outlets when we decided to keep our emergency fund, so once we hit our discussed number, we stopped putting money in that account and strictly threw our money into investments to help them grow.
We had worked pretty hard and consistently to get to where we felt was a good place and we were pretty happy with how things were going until… Chaz happened.
It all started with a tiny toothache that I told him to go get checked out. After a few weeks of not listening to his very smart wife, that tiny toothache became an electric shock of pain and we had to call the dentist in on a Saturday night to start his root canal. There went the first dip into our fund.
Then, Superman pushed himself a little too hard in the gym and popped a hernia. (He was squatting over 300 pounds so I’ll cut him some slack.) We scheduled him some doctor visits that led to speaking with a surgeon and soon found out he’s headed into surgery. That emergency fund we had perfected was headed down to zero and fast, but, that’s what it’s there for!
We obviously started preparing ourselves and started adding more money to it to get ready for our upcoming bills, but the best part of having an emergency fund? NO DEBT! It can be a little disheartening to see your hard work start disappearing when big things come up, but I would much rather see that go down then have to make payments on some medical or dental bills. Plus, a little silver lining to these surprises, it makes it pretty easy to hit our minimum spends on our credit cards to get our bonuses for some travel points. So it’s not all bad!
Some people make the decision of not having some sort of a fund to keep around for rainy days. After all, it isn’t entirely necessary if you are investing your money into something that you could pull it back out of at any time. We decided together to have one for those little bumps in the road that you just don’t see coming. Life happens, and it feels so good to be prepared for whatever flies our way.
Thanks for being here,