Why You Really, Really Need An Emergency Fund |
Posted: February 19, 2019 |
My microwave died yesterday. I know, huge first world problem, but I've got seven people living in my home, include two kids under the age of 5. Not being able to use a microwave is a big deal! In the past if this had happened it would have been a huge disaster and we would have been forced to purchase a microwave on a credit card. I would have been stressed and worried about the money. Today, I purchased a microwave with cash and wasn't worried. I was even able to purchase the new stove I've been eyeing for a while. My husband and I started our marriage 9 years ago with $446,000 in debt. It has taken us years to get to the point where we have a fully stocked emergency fund and don't need to stress about small purchases like this. Being able to build up an emergency fund was one of the first steps that we took to start getting out of debt. I personally believe that having an emergency step is the most important step you need to take when you want to reduct your debt. Having an emergency fund gives you a buffer against Murphy and all the horrible things that always cause us money stress. Start out small and build up an emergency fund of $500 and then gradually increase it to $1,000. You just need to have a little bit of money set aside so that when the car dies, the microwave breaks, your kids get sick . . . . you have a little bit of money set aside to tide you over until the next pay cycle. When you are trying to get out of debt, going into more debt is counterproductive. Having an emergency fund will help keep you from having to go into debt for the random emergency's that always seem to come up. Building an emergency fund isn't hard. If you need help to get started check out this post - 5 Tips To Help You Start Your Emergency Fund.
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