If you've followed any financial advice from money gurus like Dave Ramsey, you know that having an emergency fund is a core principle in money management.
When my husband and I were smack dab in the middle of paying down our $71,000 in student loans, we kept very thin margins. We were so desperate to pay off our debt that we kept little-to-no savings for a rainy day or an emergency.
Flash back with me to February 2014, when we were on day 50 of consecutive freezing winter days in Minnesota where the temperature did not rise above 0 F. We very suddenly decided we were going to move to Florida. There was no reasoning, just that we were tired of the cold and there was nothing stopping us.
We immediately jumped into action and got our house ready to go on the market. There was a corner of our old house that had settled a year prior, but it was a minor settling, so we didn't give it any additional thought. If only potential buyers could have glossed over that minor eye sore as well.
We had a buyer that got to the inspection phase. Unfortunately, there she asked us to fix the foundation.
$9,000 later, our foundation was reinforced and our buyer walked the next day. Oh snap.
What made it worse was at the time was that our thin margins meant we only had $1,000 in savings. Meaning, we had to do what I swore I would never do. We had to borrow the remaining money from family. They were more than gracious and willing to help, but I hate owing anyone anything, so this was majorly against my personal values.
But we had no choice.
I wish I had an emergency fund when that happened. Thankfully, we were able to pay them back in a few months and the debt was forgotten, but I knew I didn't want to be in that situation again.
We're grown ups right? We can do this without our parents help.
Fast forward to January 2016. Our student loans are no more. Our emergency fund continues to grow.
On January 24th, my husband took a flight to Minnesota for a week of work. His sister was due to have her first child (our first niece or nephew) on Feb. 14th. Since she lives in Minnesota, my husband said when he was leaving, "I bet she's going to have the baby this week."
My response was, "Shut up. That is SO not funny." Only because my flights were booked for the middle of February and I didn't want to miss the birth.
January 25th, I get a text mid morning that my sister-in-law was in labor.
Cue epic tantrum. Crazed flight searching.
If you've ever known someone with FOMO (fear of missing out), it was nothing compared to how I was feeling.
I searched every airline and every airport within four hours of me. The cheapest round trip I could find was $670. Compare this to the $250 round trip ticket I already had booked for February. I texted my husband to tell him. He said, "Book it."
So I booked it. I threw all my stuff in a bag. I booked the dog sitter (another $170). I raced to the airport and parked the car (another $25). And of course I had to pay to get text updates over WiFi during the flight (another $6).
There was no regret. There was no worry about paying for all of these outrageous last minute costs. There was no second guessing.
Nothing was standing between me and my new niece.
I wish I could say I made it in time for the birth. In fact, I was about five hours too late. But booking the trip same-day was totally worth it.
I surprised my sister-in-law who thought I was still in Florida. It was fantastic.
It wouldn't have happened without our emergency fund.
When I look back and compare these two different situations when I desperately needed cash fast, I realize how valuable an emergency fund is.
One situation resulted in fear, worry, embarrassment, doubt, months of debt repayment and a hard lesson learned.
The other resulted in one of the most memorable days of my life thus far. I was able to be present for an experience I had been waiting for - one that will be burned in my mind for years to come.
Isn't that what it's about though? Financial freedom isn't really about having a bigger house or nicer car - at least not for me. Financial freedom, for me, is to be able to choose to remove any obstacles to experiencing a full, whole, and connected life.
Even if you are paying down debt, I recommend keeping an emergency fund of at least $2,000 tucked away in a savings account. You don't want to miss the big moments or find yourself borrowing money from others because you were strapped for cash when something came up.
Has this post made you reconsider your current emergency fund, or lack there of? Hit the heart button below if it was helpful and leave a comment with the amount you would like to have in your emergency fund.
Do you have questions about personal finance or goal setting? Send me a message. I will respond! At this time I do not offer any paid services, but would love to talk with you about helping you get your money right!