Help! It is an Emergency

Steve Cummings

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Oftentimes, shit happens. Excuse my language. I know mom and dad may be reading this or even my lovely wife, but we all know bad things happen. It doesn’t matter if you are a good person or not, bad things happen. To help when bad things happen, you need to plan for a rainy day and have an emergency fund.

Have an Emergency Fund

When these emergencies happen it is great to have a cash cushion. A statistic came out that said that 39% of Americans had about $1000 saved up. The personal saving rate for Americans in 2019 was only 7.6%. 

When I hear numbers like these I wonder about their finances. What could they be spending all of that money on? What could happen if an emergency happens?

Financial Experts will always tell people to have an Emergency Fund. This is the fund that will save the day.

Emergencies happen. Your car breaks down, you get blinded by some light, Rona hits the world, you are stranded in a foreign country due to pandemic, and even natural disasters like fire, hurricanes, and snow could do damage to property. Anything could happen, and it could wreak havoc on your finances. 

People need Emergency Funds. It is there just in case of an emergency. Experts will say 3-6 months of living expenses. That is great!

It is a start to saving for a financial future. If shit happens, you are prepared to not be knocked down on your ass. You have the money saved up. It is there waiting to make a save like Superman looking like Clark Kent.

My Personal Experience 

I have been there. Living paycheck to paycheck a few years ago, I did not know about Emergency Funds. I had some savings that I would keep at a certain level. Yes, that is like an emergency fund, but it was not too serious.

I did not invest, save, and when bad things happened I would try to use the money I had to pay for it. When it got bad, I would call my dad for advice. Not everyone I know is fortunate enough to have parents with some good advice.

My father also let me live at home for 6 months while I was figuring things out as a 24 year old. I am quite fortunate, but not everyone is like this.

Have a Plan

You need to have a plan. There needs to be a fund to save money for the unexpected costs of a disaster.

I now have that kind of money saved up, and my wife and I used it during the Covid-19 Pandemic. It kept me sane as we watched people lose jobs, money evaporating in the stock market, and the eventual denial of travel insurance claims from companies for refunds. We had some money saved up.

Time to Start Your Emergency Fund

What can you do now? Now is the time to start an Emergency Fund if you do not already have one. You can start small by cutting costs such as coffee, cable, eating out, and transportation.

Take this money, and put it in a high interest savings account in order to make some sort of revenue on your savings. I like to use the Ally Savings account which has an APY of 0.60%. There are plenty of other accounts you can look for. A new favorite one of mine is Yotta Savings. It makes saving fun. 

Make a goal to finish saving for your Emergency Fund. May it be a year from now or even sooner like 3-6 months I will have an Emergency Fund.

After that use your money to either pay down debt, invest, and save for other cool goals. 

This goal can start you off by saving a dollar a day. A dollar a day equals $30 in a month, which is $360 a year. It is not much, but it is a start.

Once you can do one month of saving a little bit at a time, you can increase that amount to $2 or $3. You can even automate it in order for that savings to come out of your bank and make sure it is in an account so you won't spend it.

An Emergency Fund is a First Step For a Financial Future

Saving for an Emergency Fund is like the first step for your future financial life. You make the base layer as your Emergency Fund.

Since you could save a little each day, week, and month you have the discipline to continue this pattern for other goals like investing or saving for a house. 

This is just the beginning of something special within your life. You start small, but the compounding effect of this small deed done continuously will help you reap the benefits later in life.

Personally, I did this on my road for financial freedom. I wanted to travel, to adventure, and see the world, but I needed money. Plus I needed cash for an emergency.

I started to cut out items not needed in life like cable, eating out, and any other expensive habit. 

The savings started to mount up. At no point, I had enough to last me 6-9 months of living expenses.

Then I just kept saving and putting down my student debt, and now I am investing more than 50% of my take home income. Once you get that Emergency Fund going, the money starts rolling.

Peace of Mind

Having an Emergency Fund gives peace of mind. It is something that can help in any emergency. Bad things happen, I know these things because they have happened to me. 

If you have questions, queries, or suggestions feel free to leave me a comment. I have experienced a lot, but there are people out there that have experienced more.

Like I said, shit happens so it is time to prepare. Not everyday does it rain, but one day you may have a hurricane and you just need to be prepared for the storm. 

” Spend less than you make, stay out of debt, and invest the rest”

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