Save $1,000 for your Emergency Fund
A couple of years ago, I had a Honda Odyssey. We called it the red roller. I loved that car. For a family of 5 it was reliable, comfortable, and decent on gas. It was also the first generation with the electric rear closing doors.
After about 10 years of use, those doors gave up on me and would no longer close electronically. We’d have to manually close them each time. Well, when I took them to the shop to get it fixed, the mechanic told me it would be $3000 to replace the motors in them.
At that point in my life, he might as well have said it cost a million dollars. I did not have the money and I did not want to incur debt because we had just paid off everything. See, I thought I was doing OK.
So I did what any enterprising husband and father would do…I took them to a guy who said he could do it for much cheaper. Big Mistake. He made the problem worse as one of the doors would no longer open or close. Lesson learned. If I would have had an emergency fund, I could have gotten my car fixed instead of having to buy a new car.
Life happens, emergencies happen, and we need to be prepared. A $1,000 emergency fund can provide a buffer in these situations. Then if something happens…. and believe me, it will. We can build it back up again without going deeper into debt.
In our last video we spoke about the importance of tracking our spending. As you are tracking your spending you will discover areas of savings opportunities which can build your starter $1,000 emergency fund.
Areas that you will notice, and question are: Could we cut back on going out to eat? Maybe…we should do some meal planning before going to the grocery store. Food can be a huge budget buster.
Other items to keep an eye on in tracking our spending:
- Am I shopping online for unnecessary items because they keep coming up on Instagram, Facebook or Tik Tok?
- Could we drop a few streaming channels, Netflix, ESPN+, Hulu, Disney+?
- We can sell some items that collect dust around the house.
As we adjust from the awareness that tracking our spending brings to light, we can take that money and quickly move it to the emergency fund. You can simply set up a savings account with your bank and begin making regular deposits.
Do you go out to lunch a couple of times a week? Just by eliminating one lunch out per week can add up to $50 in a month. If you are a two-income household that could be $100 in a month. With just one adjustment what if you build in more intentionality?
For example. If you are a family of 4 and stop ordering soda when you go out to eat and switch to water; it is better for you health wise and you can save a lot of money.
Every dollar is important, and you can accomplish this emergency fund with as much intensity as you are willing to put into it. As you go further in your journey of building in financial principles, you find these emergencies pop up less and less because you are living a life of intentionality—which leads to peace and freedom.
An emergency fund is not that open line of credit on a credit card. This is cash that can be accessed in a true emergency. And here is what we’ve found: if we are being intentional about savings and staying out of debt, emergencies are exceedingly rare because you are confidently planning and spending.
I can attest to this. My family now has a 6-month emergency fund, which you will learn more about in a later video, and as a result, I do not freak out every time I need to buy new tires.
As you consider that, I would like you to continue to track your spending. As you look at your spending, I would like you to identify 1 or 2 things that you can sacrifice to help you build your $1000 emergency fund.
And as a reminder, we have a spending record worksheet in the resource section you may download.
In the next video we will learn how to plan for non-monthly items like Christmas and birthdays, insurance premiums, car, and home maintenance. So, let’s get to saving up that $1,000 emergency fund! You can do it!!!