My emergency fund is done! It took me 20 weeks, but I managed to take my emergency fund from $2,610 to a fully completed level of $10,000.
I completed this 2014 goal of mine on Friday after receiving some long awaited freelance income, as readers of this post know.
This goal was almost as important to me as paying off my debt. I consider a combo of debt freedom + a large emergency fund to be the two biggest to-do’s on my financial check list. They’re like giant building blocks that are forming the foundation of my financial stability, and now that they’re in place, I can move on to building the rest of my financial future.
How I Saved $7,390 in 5 Months
Of course, no financial feat like this would be complete without a complete break down of how I got here. Here’s a graph showing the progression of my emergency fund savings since January 1st, 2014, when I started to attack this goal with gusto.
Here’s how I did it:
Regular Contributions ($1,790)
In January I budgeted that we put away $350 of our hard earned cash towards our emergency fund. In February, I upped that amount to $370, and held steady at $370 for March. In April I upped that amount to $400, and in May I budgeted a regular contribution of $400 but only ended up paying in $300, for a total budgeted contribution of $1,790.
Tax Return ($1,643)
On March 10th, I blogged about receiving my tax return. Like a responsible little personal finance fiend, I put the entire thing into my emergency fund. This, my friends, is the art of saving in it’s truest form. Whenever I receive a large lump sum of money, I can’t help but day dream about what I could do with it, how I could spend it. Resisting the urge to do that is hard.
New Brunswick Tuition Rebate ($2,851)
Exactly one month later, on April 10th, I received my New Brunswick Tuition Rebate, a cool $2,851. Without hesitating, I moved all of that money into my emergency fund. This was easier because it brought the balance of my emergency fund deliciously close to my $10,000 goal.
Interest ($51)
Who ever said that banks were offering next to nothing on interest rates? I have my emergency fund in a Tangerine account, and was able to take advantage of a promotional 2.50% interest rate. It didn’t accumulate much, but it’s better than nothing.
Extra Income ($1,686)
My husband and I both worked at this pretty aggressively over the past five months. Whenever either of us had any spare cash from side hustling, we tossed it into either our emergency fund or our travel fund (because all work and no play makes us binge spend).
Ummm, the numbers don’t add up…
I know! The down side of building up savings (versus paying off debt) is that it’s not an exact science. Life happens, sometimes you have to withdraw money when you would rather be saving it. In our case, we had to withdraw money twice in the past five months:
- Covering first month’s rent on our new rental.
- Car repairs.
That’s how I saved up and managed to max out my emergency fund in under five months. As you can see, it’s a multi-pronged approach involving budgeting, side hustling, banking savvy and discipline with windfall money. If you can master all of these aspects, you’ll have no problem saving, just like I did.
Now that this goal is complete, what’s next for us? One word: Paris.
More on that later. 🙂
What’s your emergency fund balance at? What is your eventual goal? I want to know!