I don't want to be perfect, just better...

Tuesday, May 27, 2008

My Emergency Fund

Everyone in the PF blogging world talks about the importance of an emergency fund. For the longest time I wanted to start one and never could get my finances aligned to begin. So last year I took a portion of my 2006 tax refund and begin my emergency fund with roughly four hundred dollars. This was a major milestone for me that I had achieved, I had money in the bank set aside for an unexpected emergency, I felt very proud of myself. I would not have to wait until the next pay period if something happened, I had "something on it, even if it couldn't cover it all' I wanted to continue this proud feeling so every two weeks I would transfer in twenty five dollars. This doesn't seem like much, but sometimes it was a sacrifice to get that twenty five every two weeks. I trimmed here and there to find it.

This was my first real savings experience where I was putting away money for no cause, or maybe I should say for a non-tangible item. I had saved money before for down payments, Christmas,trips, but never applied the savings principle to a non named future need. As I have gotten older I think back on the amount of money I have spent - I hate to say wasted but it was on non essentials, cute stuff or so I thought, and I think of what that money could do for me and my family now and I really want to cry. My moment of clarity when I knew that I had to get my financial house in order was something so simple, but it devastated me. I bounced a check, and the Bank of America somehow reordered the cleared items to make even more checks and debit card purchases bounce. So I went from bouncing one check to having bounced eleven items and owing thrity-five dollars for each item. I had just gotten paid and may paycheck deposited electronically only covered a portion of what was overdrawn. I would not see another cent for two weeks. I had no gas in my car, I had very little food to feed my two, I had not paid the my cell phone our only means of communicating and my paycheck had just been ate by BOA. That was my moment. I said if I made it through those two weeks, then I would begin saving, and so I have my emergency fund is still not large (Total as of today $3, 704.63), but I put that twenty five dollars in every two weeks faithfully now. I have even taken twenty five dollars out of my unemployment benefits to add to that fund.

I know what it is to be in a lurch so bad you wonder how it could get any worse. Then Murphy's Law kicks in and kicks you in the head. I am a strong proponent of putting a little aside even if to me or to you it doesn't seem like much.

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