Monthly Archives: September 2016

Hello Emergency Fund!

Have I talked about the big emergency fund yet?  I know that I mentioned step 1 very briefly.  That particular emergency fund was a smaller amount of $1000 or so.  I also discussed step 2, which was the debt snowball.  Again, AMAZING step.  But now on to STEP 3!

Step 3 is the BIG emergency fund.  The big daddy.  It’s supposed to be 3-6 months of savings.  It’s a buffer between you and the unexpected.  It’s to keep life on track instead of throwing it way off course when the unexpected financial crisis happens.  It is said that 78% of us will have a major negative financial event in the course of a decade so the chances of you having one are pretty good. Again, this fund is for financial emergencies. These bigger emergencies would be illnesses or long hospital stays, car repairs, home repair, property repairs, asphalt paving (you’ll get that in a minute), or just plain old bill pay during job loss!  Usually it’s something unexpected.  Car registration fees do not come out of an emergency fund.  Those are something you would prepare for and budget in.  Now, you’re supposed to have this big emergency fund in place before you buy a house.  However, some people already have a house before they’ve run into the Dave Ramsey program.  That’s okay, just start the steps from the beginning and you’ll get here.

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