My paycheck hits today, and so does my automatic transfer of $500 into my Emergency Fund savings account. That takes me, in 18 months, from a person who’s never heard of an emergency fund, to a person who was sure that the idea of saving six months’ expenses was impossible, to a person who…has saved six months’ expenses.
[Yes, yes, I was 35 and had never heard of an emergency fund. Live and learn!]
Here’s the thing, though, although I want to be all happy joy joy about how good it feels to have this done — and it does — my predominant feeling is that I kind of hated saving like this and don’t want to do it again.
The Story of My Emergency Fund
My e-fund began with $75 I stuck in a new savings account last summer. I put more money into it in fits and starts over the course of the summer and fall; I was paying down my credit card debt at that time, so it was never more than $250 a month. I also had to use some money from it for medical bills. So, at the end of December it was at $1000.
I haven’t had to use it again this year. So from January until now, I’ve faithfully put $500 a month into it. Never more, never less. Accordingly, I’ve arrived right on schedule at the full amount eight months into the year.
Why’d You Do It Like That?
A couple of reasons. First of all, the PF community convinced me that credit cards were not a sufficient emergency strategy 🙂 Second of all, I had a strong sense of urgency about my student loan debt (which was accruing interest) and less about my credit card debt (which was on a 0% promotional card). I really wanted my student loans GONE. However, I thought that hitting that milestone would mean that I should try out a new strategy: one where I directed smaller amounts to multiple goals, rather than flinging everything at a single goal. So, with the loans gone, I started splitting my cash towards multiple goals: credit card payment (until I finished that in December), travel fund, down payment fund, and various sinking funds for things like health and car repairs and professional expenses, along with the $500 emergency fund contribution. I thought it would be good for me to try to be patient for once, and I was thinking about writing a post when I was done that went something like “what building my emergency fund taught me about the joys of waiting.”
What’s Wrong With That?
Good question! It turns out that after nearly a year of trying it out, I still kind of hate slow and steady progress. There was nothing that was exciting to me about seeing exactly the same amount go in each month; nothing about it inspired me to side-hustle more, or make budget cuts. Also, it just seemed to take FOREVER. Since, according to the rules I set for myself, I couldn’t put any extra money in there, I was stuck with taking almost a full year to get it from $0 to $5000. In the same time, I managed to accrue $1000 in my down payments fund, so I could’ve been writing this post at least two months earlier. Or say I’d put my $1000 tax refund in there instead of in my Roth IRA — bam, I’m done with the e-fund by May! That’s not even counting whatever I might have put in there from side hustling.
I don’t regret having given patience a real and sincere trial. I didn’t change my e-fund rules mid-stream, even though I’ve felt restless about it for months, in large part because I wanted to see if doing regular contributions for months on end slowly changed me, improved my feelings about it. And I’m certainly glad to have that money sitting in an account I’ve mentally marked “untouchable.”
But I don’t really want to approach future financial goals in this one-foot-in-front-of-the-other kind of way. And that’s what I learned from building my emergency fund in the way that I did it.
OK, So How Are You Going to Take On Your Next Goal?
Well, friends, that’s a story for another post…ok, on Monday 🙂