Thank God for the Emergency Fund

I am so glad I finally forced myself to start an emergency fund. I finally realized the extreme importance of having one in 2006 after having to give up our house and going through the toughest year financially.

I thought there's no way I could take money to put aside for an emergency. We were living paycheck to paycheck, but realized I couldn't afford not to put money away anymore. I started in 2006 with $5 automatically withdrawn every 2 weeks and put into my ING savings account. I had raised the amount by $1 every few months. Then late last year I needed to put $180 aside to pay for our auto insurance. We pay that every month and a half so I needed to put an amount aside so that it wouldn't get spent. By doing that, I noticed that I didn't really miss that $180. From that time on, I've been putting $200 into the EF.

There have been a few times that we drew on it so at the moment it's at about $800. And now we need to draw on it again for car repairs. You don't know the relief I felt when I was told we needed $1500 repairs on our car. It wasn't that I was happy we have to shell out that much on repairs, but it was the fact that we have our EF to draw on. The repairs can be done in 3 steps and they are not emergency repairs which will allow us to save up. Now I have enough for the first and most needed repair. Then it will be time to build back up the EF and then drained again and then repeat this one more time.

It's such a nice feeling not stressing out about this like we've had to do soooo many times in the past. Everytime an emergency came up, I'd go into panic mode and stress about how we are going to pay our bills and catch up.

We have zero credit cards (not by choice) which right now is a good thing because we don't have that to rely on and it won't get us into more debt.

If you don't have an emergency fund, I highly advise you to start one. Start with $5 dollars! It may not seem like much but it will add up and you will be surprised how much you will have by the end of the year. Increase the amount a little every few months. You'll see that you won't even miss the amount you are putting aside.

I also highly recommend you get the book Debt Proof Living by Mary Hunt. Borrow it from the library or get it from PaperBackSwap.

Would you like to get an ING Direct account and get $25 free? When you open an account with $250 you'll get $25. Email me at jandswinder[at]yahoo.com for an invite.