Beating Debt with An Emergency Fund

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Unbelievable, but it’s been two months since I started recounting Our Get-Out-Of-Debt Story. If you missed it, start at the beginning. Special thanks go to The Happy Housewife and Freebies4Mom for guest posting these last two weeks. It was wonderful to have them share their money-saving wisdom. Now, where was I?

Ok, you’re in debt? Or maybe you just don’t feel like you’re on top of things financially. Here’s my quick recap of what has helped us feel better about our money situation:

1. Stop using credit.
2. Listen to Dave Ramsey.
3. Take a financial snapshot and make some goals.
4. Start budgeting.
5. Reduce expenses.
6. Increase income.

These first six steps worked together to help us get our spending under control. If you do these things, I’d be surprised if you didn’t feel like you were more the boss of your money than the other way around.

Once we got to this point, the next step for us in this journey was to have an Emergency Fund. Dave Ramsey calls this the First of his Baby Steps. He recommends having $1000 liquid, that is easily available. Don’t have it too available. But it shouldn’t be in investments that are hard to get at.

And it’s. just. for. emergencies.

The theory behind this small emergency fund is that it is enough to keep you from acquiring more debt. It’s a life preserver, if you will. It’s not a steamship to take you off to complete safety, but it’s enough to keep your head above water in case your car breaks down, you get a cut in hours, you have an unexpected medical bill. Having this flotation device helps cushion these blows without sinking deeper into debt.

If there isn’t excess in your monthly income to provide for this emergency fund, then you have to reduce expenses and increase income some more. There is no other solution. But, every little bit helps.

Even if it’s something as small and simple as starting a money jar, do it. Grab an empty pickle jar and start putting loose change in it. Have a garage sale? Put the money in the jar. Get a gift of money? Put it in the jar. Sure, you could go get take-out tonight, but you’ll feel better in the long run eating rice and beans tonight and putting that money in the jar. As it fills, you’ll have tangible evidence of that financial life preserver.

There’s a reason why they call it “saving for a rainy day.” It never hit me until I married a carpenter. When there’s only “outside work” to do and it rains, guess what happens? You stay home. And when you stay home in construction, you don’t get paid. Hmm….

OK, then. Save for that rainy day. Put aside $1000 that you won’t spend unless you have to. You won’t be sorry.

Part Eight: Get that debt snowball rolling.

What do YOU do to save money? We’d love to hear it.

In the interest of exchanging good ideas, please do not post affiliate links, giveaways or deal posts. Instead tell us what you do to stretch your dollars a little farther. Share concepts and ideas that have helped you grow in saving money and being a better steward of your resources.

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If you don’t have a blog, tell us your bright idea in the comments. Can’t wait to learn some new tricks!

About Jessica Fisher

I believe you can get great meals on the table -- and still keep that pretty smile on your face.

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  1. Stephanie says

    Currently we have auto w/d through an online bank. That seems to work the best for us at this time! We just set up a Christmas fund there too!

  2. Mrs. (not) the Jet Set says

    I love having an emergency fund! We are now to the point of having the 3-6 months worth of expenses emergency fund. It was such a blessing when our youngest was born with a tumor and we could just use our own money out of savings and not have to go into debt while dealing with a person crisis.

  3. crayon25 says

    We, too, have been blessed by Dave and his ministry. We just had to replace our a/c unit and were able to write a check out of our emergency fund (a money market acct) to pay for it instead of getting a loan!!!

  4. Michele says

    I was taught when I was younger to always save for a rainy day. So ever since I started working I put money away in the bank. I just wrote a check every month to a mutual fund and built up my savings from there. We also keep a cushion in our checking account for money we need immediately.

  5. I don't have much of an emergency fund, YET! I'm working on it…I'm single mom and work one full time job and two part time jobs. The income from one of my part time jobs is now going into the emergency fund.

  6. Joyful says

    I found your blog from `Gluten-Free Homemaker.
    We are most definitely in debt and we are nearing retirement age.
    You have a great blog.

  7. baby steps: we bought a compost bin (made out of recycled material) and put all our non-meat and non-dairy food items in it…and that pesky dryer lint! We feel as if we're doing well by our environment, save water and money by not using the garbage disposal AND we will soon have our wonderful, home-made fertilizer!

  8. Hoosier Homemade says

    We really need to save for emergencies. It's hard to make it a priority, but it needs to be done.
    I'm sorry I didn't comment yesterday, I usually always comment right after linking up, not sure what happened.
    Thanks for hosting!

  9. Budget Man says

    Learning about making a budget and then living on one has got to be one of the best ways to financial freedom!


  10. Thank you for advocating for people to stay away from debt by planning for emergencies. Keep up the good work!

Thanks so much for participating in this conversation about "a mom's life."

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