Emergency funds are kinda hot right now, don’t ya think? Well not really…people have most likely had them for a long while. There has, however, been an increase in posts discussing the nagging but super important topic of emergency funds.
The discussing of these surprisingly not so common savings accounts got set off by a Billfold post on The Story of a Fuck Off Fund.
Age 12: Budding Business Owner?
My first real tango with the aspect of an emergency fund happened when I set out to start a business. I was 12 years old, had just finished 6th grade and felt ready to conquer the world. Sort of.
My mom owned an assisted living business and had just opened a new location. I pitched the idea of having a candy counter to serve the residents snacks and promptly got to work
I had separate bank accounts for my regular savings and my business money. I started buying the snacks in bulk to save money and from there I understood the importance of having a “buffer” in my accounts.
Every month I would stash away some of the money I made and put it into my savings account to be used for “a rainy day” or a business investment, as my 12-year-old self liked to call it.
Age: 18-20 University Life
My years at university consisted of going through different shades of broke. “Being worried but still sort of okay” type of broke. “Not having a lot of money” type of broke. “Oh my gosh, am I going to overdraft” type of broke.
My emergency fund fluctuated a lot during this time. Emergency funds were an ingrained aspect in me because of my car. Faced with the aspect of having to pay for repairs, oil changes, registration, and car insurance costs, I knew very well how expenses could sneak up.
I made it a habit to always have at least $1,500 in an emergency fund during the time.
For a while after graduating university, I worked a job I that was really exhausting and draining both physically and mentally. During this time, I made solid efforts to not let the job become a long term thing.
In addition to job hunting, I started contributing more and more to my emergency fund. For a while, I contributed a good chunk, until my student loan repayment started. Then I was stuck at a cross-roads.
Contribute more to my emergency fund (it was still small at this point) or pay off more of my student loan debt? What was the “right” thing to do?
After reading a dozen or so articles, I decided to make big payments on my student loan debt, but still contribute a sizable amount to my emergency fund. It’s all about personal circumstances and priorities. I figured out what would work for me.
I am so glad I did.
My job started to become unbearable, I had a decent size emergency fund, and an opportunity to move overseas for a while presented itself.
I still find it funny how a story on emergency funds went viral around the same time I was making a plan to quit my job without a solid new job lined up.
I quit my job, went to an interactive technology festival, went to Oregon, then started my new job in Thailand. My emergency fund was my friend during those few short weeks, when expenses started to pop up.
Thank you emergency fund. I’ll never stop giving you attention 🙂
What is your history of an emergency fund? How much or how many months of expenses do you consider is necessary to have in one?