My Emergency Fund is Officially FULL!

Screen Shot 2015-08-14 at 10.30.59 AMMy 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 🙂

34 thoughts on “My Emergency Fund is Officially FULL!

  1. I too have issues patiently waiting for a goal to hit. It’s sooo much more satisfying dumping my all into one bucket and then moving on to the next.

    Anyway, congrats on funding the EF!

    1. thesingledollar says:

      Yes, it’s like the difference between throwing knockout punches and whatever the punching equivalent of Chinese water torture is. As you might be able to tell, I am not a boxer 🙂 But you get the point. It’s just more satisfying to WHAM! hit one goal and WHAM! hit another!

  2. First: Woooooooo! Funded!

    Second: I totally get your feelings on working toward multiple goals. It sucks. And it’s probably why I’m not having the best feelings toward being debt free right now. I don’t feel like I’m working toward anything. Too much is going in different directions. Think of how much further along I could be if I focused on ONE THING! Sadly, as an adult, I don’t think I can do anything but have multiple goals. Roth, 401k, House Fund, Travel Fund… they aren’t going to fill themselves. Line up kids, everyone gets some.

    1. thesingledollar says:

      You are a good grownup! I’m going to try something in between “do everything” and “do one thing” next.

  3. Cindy says:

    Completely agree! I’m terrible with sinking funds. I want to concentrate on one thing at a time, and get it done as soon as possible. I’m also bad about letting new goals unravel old ones: Several times last year I built up a $3,000 emergency fund, only to change my mind and decide that was too much while still in debt, throw the extra at debt, and then a few months later decide I needed a bigger emergency fund, and build it up again. I have a feeling once my car loan gets below my (now) $5,000 emergency fund that I’ll end up throwing some of that in to finish off the loan, and then be building it back up again. Sigh!

    1. thesingledollar says:

      Yeah, I do the same thing, or have done — I had $3000 in emergency cash piled up 18 months ago, and put it all into starting my Roth IRA. I don’t regret that choice, just noting that “changing my mind about needs” is something that happens to me too 🙂

  4. Jenna says:

    Congrats! How awesome to have a big e-fund like that — especially coming from where you started!

    1. thesingledollar says:

      Thanks! I’m so thankful to have had a relatively uneventful year during which to stock it up.

  5. Congratulations! 6 months of expenses is VERY impressive!

    I commend you for sticking to your saving schedule even though you didn’t care for it. Now you can say that you truly gave the slow and steady/multiple goals approach a fair shake and know it isn’t for you.

    I’ve never tried working on only one saving goal at a time, but I think I should give it a chance, like you did.

    1. thesingledollar says:

      Yeah, I’m pleased with myself for trying it, and making it work, even though it wasn’t natural for me at all. And of course pleased to have the $$ in that account!

  6. Kirsten says:

    That is awesome! Congrats! Though I am totally with you – slow and steady progress is, well, sloooooooow. I know patience is a virtue, but it’s not a virtue I have.

    1. thesingledollar says:

      Patience is terrible! The worst! I want everything done right now 🙂

  7. Woot! Congrats girl! You can now sleep a little easier at night and focus on what’s ahead. 🙂
    *Hi-five*

    1. thesingledollar says:

      That’s my plan! Thanks! I’m relieved nothing came along this year so far to interfere too dramatically.

  8. Hannah says:

    So have you officially decided to loosen the purse strings, or are you back on the investing bandwagon? I mean peaches are in season, so you might end up spending $500 on peaches in the next four weeks.

    1. thesingledollar says:

      LOL. Neither! Well, ok, maybe the peaches.

  9. Liz says:

    Sweet! Congrats on finishing and kudos for taking the patient route. I’m the same as you, I don’t like to be patient if I can help it. I’m excited for what you have to say on Monday about your next goal.

    1. thesingledollar says:

      Hint: it does not involve patience 🙂 Thanks for the kudos!

  10. MJ says:

    Congratulations!

    Man oh man do I relate. I think it’s the power of the bold goal. That steady progress thing doesn’t work for me, either. It’s got to be leaps and bounds. And that’s okay. It’s just another way to experience life.

    I can’t wait to hear about what’s next!

    1. thesingledollar says:

      I gave patience my best shot! Turns out I suck at it 🙂 Oh well. I like the ka-POW! approach to finance.

  11. Such exciting news – congratulations!! And I can totally understand your frustration with slow and steady. 🙂

    1. thesingledollar says:

      Thank you! Yeah, isn’t slow and steady the worst?!

  12. Leigh says:

    Congrats! So what are you going to do with that $500/month going forward?

    I’m not good at making slow progress towards goals either. That’s why I do one goal at a time these days. This year that is going: Roth IRA, pre-tax 401(k), after-tax 401(k), cash reserves* up to my goal, grad school savings (I’m starting my MS in the fall), and then mortgage extra payments. I’ve been really frustrated this year in that I probably won’t make any extra mortgage payments because I shifted priorities around. But next year I will be back to paying it down aggressively!

    *I don’t use the term “emergency fund”. I prefer “cash reserves”. It’s not just for emergencies – it’s for when I need cash on hand, say to buffer living expenses while I’m throwing my whole paycheck at my 401(k). That works for me since most “emergencies” can just be covered with cash flow.

    1. thesingledollar says:

      Thanks! I’m going to snowball it onto my down payments fund going forward (see today’s post). I like your idea of going one goal at a time — even to the point of putting your whole paycheck towards your 401(k) til it’s full! That’s pretty cool 🙂 Also, congrats on impending grad school.

  13. That is fantastic congrats!! I think you did it the right way. Maybe it’s boring to some people, but by having a set amount and schedule, you knew EXACTLY when you would reach your goal, and that’s more than most people can say.

    1. thesingledollar says:

      Thanks! I was definitely glad I tried out boring 🙂 I’m going to try something different for my next short-ish term financial goal, but this was definitely an interesting experience.

  14. Kara says:

    I also hate the slow and steady approach. I finished off all my student loans this year and was able to crush $12,000 in 5 months because I threw every single penny at my debt. Now having to divide things up between various funds and stick with a plan is so much less exciting and my drive has definitely dropped off some. It’s just not the same!

    1. thesingledollar says:

      It isn’t! On the other hand, the new big goal you’re working towards might make you more excited as you get a little closer to it. You’re probably partly experiencing post-payoff ennui, which I swear is a real thing.

  15. Chonce says:

    Congrats on meeting your EF goal! I too feel like it’s taking me forever to reach the amount of savings I want and even though I’ll get there eventually, it feels kind of blah. I’m approaching my debt repayment completely different though by gradually increasing my contributions and it’s helping me stay motivated during what feels like such a long journey.

    1. thesingledollar says:

      Yeah, finding ways to keep motivated is totally key. Otherwise I’d be spending it all on tomatoes and cheese right now! I think you’re doing great. Keep on keeping on!

  16. Hooray for a full e-fund! You know the stats on how few people have them, so having yours fully funded is a BFD! As for multiple goals and slow progress — others have said it as well, but yeah, that’s just how it goes. What will happen over time, though, as you have more money invested, is it will start growing faster on its own (that whole passive growth that people seek out), and that’s when stuff gets more satisfying. So this is my little “It gets better” pep talk. 🙂

    1. thesingledollar says:

      Thank you for the pep talk 🙂 I think — I know objectively how few people have one. But mine seems really small somehow! Even though it took me all freaking year to put together, and even though it’s definitely more money than I’ve ever had in savings before.

  17. I’m with you on not being thrilled by “boring”, predictable, regular payments. I also had a hard time being patient with our repayment of our business debt when we had savings that we could just throw against it. I think there comes a point where you just let regular investments grow – putting the “passive” in passive income – but to get your personal finance foundation established, it’s best to be intentional and to make proactive decisions month by month rather than to set things in auto pilot motion.
    In the end, however, still a HUGE congrats on having your emergency fund saved up!

    1. thesingledollar says:

      Thanks! Now that I’ve reached this huge goal it feels kind of small…time to get on to more 🙂

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