Last year I really needed to quit my job. I was in a work environment that was not a good place for me. I also was feeling burnt out, like I needed some time off to rest and recover. However, we had taken on investment debt and had mortgage debt and there was no wiggle room for our family budget at that point to drop back to one wage. Essentially, I had to wait in that job until I found another suitable role. It wasn’t an ideal situation. However, it taught me perseverance and made me realise that we needed an emergency fund! If we had had an emergency fund, I could have left that work environment and had some time off while searching for another role, without the financial stress.
What is an Emergency Fund?
An emergency fund is a dedicated savings account designed to cover unexpected expenses or financial emergencies, such as medical bills, car repairs, job loss, or urgent home repairs. Its purpose is to provide a financial safety net, so you don’t have to rely on debt or high-interest credit cards when unforeseen costs arise. Typically, financial experts like Dave Ramsey recommend having 3 to 6 months’ worth of living expenses saved in this fund, allowing you to handle emergencies without disrupting your long-term financial goals. It’s about creating peace of mind and stability in uncertain times.
Why Saving for an Emergency Fund Feels So Tough for Me
Now, I am going to be honest, saving for an emergency fund has been much harder than I expected, mostly because saving money for the sake of an emergency fund just isn’t as motivating for me as other financial goals. There isn’t a shiny reward at the end of the activity. I know the logic behind having a fully funded emergency fund—it’s like a security blanket for life’s uncertainties. But when it comes down to it, saving thousands of dollars just to have it sitting there, unused, feels… boring. It’s not like paying off debt, where I can see progress, or saving for something exciting like a trip or a home project. The “what ifs” that this money is meant to cover seem so far off and abstract, making it hard to stay motivated. Then, I remind myself of the work situation last year and the motivation comes right back.
Trying, Trying Harder
What I’ve realized is that creating an emergency fund is that it isn’t just about the money—it’s about creating a buffer between us and financial stress. The idea of having a few months of expenses saved means I can have more flexibility and options. And oh how I like flexibility and options!
So, the way we have been doing the savings for our emergency fund have been setting aside money with each pay (budgeting) and using tax returns and any extra bits of money to top up the emergency fund. It is sort of working. I could be more disciplined with this process.
(On a side note, I have been loosely following Dave Ramsey’s seven baby steps from his book The Total Money Makeover, just adding for context)
Saving for an emergency fund does not feel glamorous, but it is part of my larger goal of simple living. Financial peace is a part of that simplicity. While I sometimes struggle with the idea of “just in case” savings, I know that having this fund will allow me to focus more on the things that bring joy and fulfilment in the long run—without the weight of financial inflexibility.
Are you also finding it tough to save for your emergency fund? I’d love to hear how you stay motivated, or if there’s anything you do to make the process easier!
Disclaimer: The information provided in this blog post is for general informational purposes only and is based on my personal experience. It should not be considered financial advice. Please consult with a financial advisor or other professional to determine what may be best for your individual financial situation.