When we started our debt repayment with gazelle intensity, we just wanted to be debt free, like yesterday. We just wanted to be free of the shackles of debt, so we didn’t lay the proper ground work. I knew I should put money in an emergency fund first, and I knew our family of 5 needed more set aside than the $1,000 Dave Ramsey recommends because I am self-employed and my income varies. Still, every time we had extra money, I couldn’t throw it on our debt fast enough.
That, my friends, was a mistake.
While we had some very tight months a time or two, we managed to get by without a large enough emergency fund, until the last two months when several expenses hit us such as my medical expenses and my husband’s pay being docked by $700 for two months.
We couldn’t bounce back from those unplanned expenses, and we had no security net in the form of an emergency fund, so we went back into debt.
I can’t tell you how much I hate losing ground on our debt repayment plan.
After next month, my husband’s paycheck should be back to normal, and after one more test in November, I think my medical issues will settle down. We will be able to start making progress again.
And yes, I still want the debt gone, but I have learned the importance of an emergency fund. If it takes us the next two, three, four months to fully fund an emergency fund to at least $3,000 (ideally $5,000), that is what we will do. Debt repayment will take a back seat until the emergency fund is in place because I never want to go in debt again.
If you would like some help starting or growing your emergency fund, check out this giveaway:
{ 16 comments… read them below or add one }
This past March our A/C broke so we had to replace it for $5500. We don’t have that much in an emergency fund but we had enough to carry us through the next few months while we made payments on that bill.
Yes, I had to use our emergency fund when I was pregnant with my 2nd child. I broke a tooth and even though we had dental insurance, I still had to pay $5,000 out of pocket! Thankfully that was the EXACT amount me had in our emergency fund. I was so happy we had it, but very sad that it was completely drained over a stupid jordan almond vs. soft teeth during pregnancy.
Yes, I have had to use emergency funds, for a broken down car and a water heating going bad!! Thanks for the chance to win!
That SUCKS! And it’s exactly what happens, you know? WHen my wife and I deicded to get out of debt and start our life together, we made the smae mistake of throwing everything we had at it. It definitely bites you in the a*s, doesn’t it? Lol, we worked it out and it sounds like you guys are working it out too. It takes time of course. Always takes time.
When I was unexpectedly laid off and all on my own, I was amazingly thankful for the small emergency fund I had. It allowed me to keep my apartment and car until I landed my next job!
I agree 100%. You might not be able to fund your emergency fund to the level that you ultimately choose, but having even a little cushion is important as it can take a good chunk of the sting away if something big happens. Sorry you had to learn the hard way, but it gives you more practical knowledge moving forward. Good luck!
Extra money is always good with holidays coming : )
Since my husband’s job transfers us every couple years all over the state, we use our emergency fund to be able to put down a rental deposit when we are transferred…and hopefully we are able to pay it back once we get our deposit back from our current place!
This post comes at a perfect time for me! I am also trying hard to pay down debt, without an emergency fund in place, and $800 in unexpected car/computer/cell phone repairs have blown up my budget! I guess I need to start working on my emergency fund, too!
I had to use our emergency fund several years ago for a root canal. We were so thankful that the money was there!
We had a 12K emergency/savings fund and had to use it when hubby lost his job one day without any notice. We were able to live for 6 months while he was looking for work.
When our furnace and a/c died last spring.:(
I used it to pay off my car when we were modifying our house loan. At the end of the day, paying the loan freed up the payment $, plus the interest of $50 monthly.
I’ve had to use my emergency fund for an unexpected car repair. Sure beats using a credit card!
We had to use some of our emergency fund to fix a faucet in the tub…the ONLY tub..
tarter95 at hotmail dot com
I had to use mine to get new brakes on the car and I am still working on getting it back up to par!
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