The #1 Best Financial Thing I’ve Done

The #1 Best Financial Thing I’ve Done

The #1 Best Financial Thing I’ve Done | brokeGIRLrich

Three words – Emergency. Savings. Account.

I was recently writing a post for another site I write for about how to budget with variable income and while it was more of a step by step guide, I realized, I feel very, very passionate about my emergency savings account.

So I’m writing this ode to it today.

I’m actually a pretty anxious person. You might not get that from meeting me for just a little while or reading about the fact that I wander the world like a crazy vagabond and hop from job to job all the time.

But I am hardcore anxious all the time, in part thanks to me just being me and in part due to an actual diagnosed anxiety disorder I’ve had since I was about 10.

Systems and plans help me out a lot though (and prayer during panic attacks, for real though, check out the studies – or meditation for you non-religious folks).

Prayer generally doesn’t manage to pay my bills though (I mean… maybe? I’m not sure of how the man upstairs sorts all that out and there have been some fervent “how am I going to pay this?!?!” messages sent up over the years). But as firmly as I believe in prayer, I also believe help comes to those who help themselves.

Benny, my friend, you so wise.

Benny, my friend, you so wise.

Wow. Didn’t expect this to take such a spiritual turn. Well. Here we are anyway.

In the help yourself category though, I really believe one of the best things you can do, freelancer or not, is build up a solid emergency fund.

There is literally a correlation between how high that number goes and my anxiety levels.

When I didn’t have one, my initial goal was to get it to $1,000 – just a little breathing room to weather the little emergencies of life. And every dollar that went into it felt so good, that I didn’t have much trouble buckling down to meet that goal at all.

Then I thought, I should really have as much as my insurance deductibles, which is about $5,000. So I set that goals and started towards it. I’d hoped to do it in one year, but that didn’t work out. I was pretty close by the end of year two when I got an amazing (so it seemed at the time) job offer and realized that I could raid my emergency fund to make the move and literally double my salary.

So I did. And for the first three months of living in that new place, I was the most anxious I’d been in years since I knew that if anything happened, I wouldn’t be able to cover even a month of expenses. When the number finally got back up to around $3,000, I slept so much better knowing I had 1 month of expenses fully saved up.

I made it my goal to get that number back up to $5,000 by the end of the year, succeeded and felt like a rockstar. A rockstar who sleeps really well at night.

When that job crushed my spirit, I was able to switch right into freelance stage management since I was confident I could keep my expenses low by moving in with the folks for a while and continuing to add to my emergency savings fund. It’s up to around $8,500 right now with an end goal of $10,000.

Emergency Savings Account

Shazam! That is a long fought to number!

I realized though that as I go into this upcoming slow season (May-September), I feel way more confident. If I didn’t make a single penny for 5 months, I’d be ok.

I wouldn’t be particularly happy, but I would be ok.

As it is, I already have 2 jobs lined up. Both pay lower than usual and the first one is two months of work that I probably won’t get a paycheck for until mid-July. But it’s an opera and I’ve wanted to do one since college! The main reason I didn’t hesitate to take the job was because of my emergency savings. I thought – I can float those two months of expenses, using the emergency savings, if I have to, and then replenish it with the stipend check when it arrives.

And it was a glorious feeling.

Emergency funds not only lower stress, but they can open additional doors of opportunities.

 What’s your emergency savings fund goal?


**This post is linked up over at Frugal Friday! Looking for some more great personal finance reads? Check them out there. Written a great personal finance read? Link up with them!**

32 thoughts on “The #1 Best Financial Thing I’ve Done

  1. An emergency fund is my life! I learned the hard way a couple of years back when I needed unexpected oral surgery. I’d only been self-employed for a year and found myself slacking in the e-fund department. Well, I also found myself with a credit card bill when my dental insurance wouldn’t cover the procedure. I’ve been an emergency fund lover ever since.
    Amanda Abella recently posted…Comment on Free Workshop: #MillennialsMeditate by How to Have an Affordable Healthy LifestyleMy Profile

  2. My number is absurdly high (4 dependents, 2 households, was laid off during the Recession) and even the thought of needing to live off it gives me heart palpitations. There goes a flutter! Honestly I keep saying “2 years’s worth of expenses” but I don’t know if I could honestly sit back and feel “secure”, y’know? I would sleep at night, yes, but the security number is about ten times that number.
    Revanche recently posted…Just a little (link) love: kitten scoots editionMy Profile

  3. I love that you mentioned that emergency funds aren’t just for peace of mind/lower stress but also to open up opportunities! And you rock being able to save so much for your emergency fund! In addition to an emergency fund, I’m working on lowering my expenses for the same reasons-I want to be able to live on less and be able to take opportunities that come my way (such as my husband quitting his job someday to start a business) without being tied down to a paycheck.

  4. Emergency funds are sooooo important. They open doors to take opportunities you wouldn’t be able to otherwise, they give you options. I had a few unexpected expenses come up with my move recently but I didn’t sweat it because I knew I had an e-fund I could use if need be. Ultimately I was able to squeeze the extra cash out of my budget rather than my e-fund but it was great knowing it was there. It’s my little security blanket when money is stressing me out.
    Liz recently posted…Should You Automate Your Finances?My Profile

  5. You are so right about this. Ever since my husband and I hit the $3k mark on ours, we’ve felt so much better. We use our e-fund as a savings/vacation/splurge account (which I know they say NOT to do), but it has helped us sleep so much better at night. We’re going to continue to build it while paying off debt, simply because not having one feels so scary.

    Love this post!
    Liz recently posted…Sallie Mae Makes it Hard to Pay Loans Off EarlyMy Profile

  6. I didn’t know how important an emergency fund was until I was unemployed for 4 months. I was just glad I was still living with my parents, but that whole experience opened my eyes. And now that I am in my own place I make sure I put something towards building this fund up. As of right now I have $2K saved and knowing that I have money saved just in case is a huge relief. My goal is to have a fund of $5K in 2016 with my ultimate goal being $20K.
    Sylvia @Professional Girl on the Go recently posted…2016 Goals: Quarter 1My Profile

    • Those are awesome goals! I realized that when I hit 10k – if I ever switch to having a “normal” job with regular bills like rent, utilities, etc. that 10k probably won’t reach the full 6 months, so I think I’m going to have to rethink that number. But honestly, even 5k feels like a very solid cushion, so I’ll be pretty stoked to reach 10k.

  7. I couldn’t agree more. Having an emergency fund – during a financial emergency – is the difference between a panic attack and an inconvenience. Sure, I get annoyed when I have to spend $600 to get my front porch fixed (the one pillar is rotting) but I am not panicked. I just have to dip into my emergency fund. My favorite quote is “Debt takes away choices,” but I guess the opposite is also true “Cash creates more opportunities.”
    Bill @ The Money Professors recently posted…Save Money from Previous MistakesMy Profile

  8. Our emergency fund gives me SOOO much peace of mind. It’s taken years to get it where I wanted it. We’ve made small goals along the way. It’s not at $10,000 which is about 6 months of expenses for us. I’m really happy for it. It gives us more options in terms of switching jobs or dealing with unexpected expenses.
    Christine @ The (mostly) Simple Life recently posted…Popular Things We Don’t Spend Money On + Our SplurgesMy Profile

  9. Congrats on getting your emergency fund so high. I am working on mine right now with the goal of having $1000 in emergency. I actually cut back by a lot last month in order to pay all of my April bills by the end of March, now I don’t have any bills due until May which means every penny I make can go into the emergency fund (as I get paid in May enough to cover the bills of May).

    My account seemed very empty for a while (was down to less than a dollar at one point) but I knew that no bills had to be paid and that income was about to come in. Now it’s a few hundred dollars again with no bill do for nearly a month.

  10. I’m with you girl, I didn’t even know about emergency funds till a year ago and now have more of an emergency fund process.

    I keep a minimum $2,000 in my checking account and when it goes over $4,000 I move it to my investments. That $2,000 minimum buffer is super nice and I immediately replace it if I dip in accidently. I also keep about $2,000 in savings just for fast cash and the rest of my money goes into my investment accounts that can be sold for liquid cash in 3 days. I figure $4,000 in my checking and savings should be enough to last me three days to tap into my investments if needed.

    Again this is all in case of an emergency, but you are SO right. It’s super comforting knowing it’s there, frees you up to more options in life!
    Wallet Squirrel recently posted…Robinhood App Review: I saved $420 in trading fees in 6 monthsMy Profile

    • I think your investment set up is pretty wise. I think it’s possible to take an educated guess that most of your emergencies will come in under $4,000 – and then you don’t have to worry too much about market fluctuations and how that could effect you if you did have to dip into the investment side.

  11. Yes yes and yes!! I love my tiny little emergency fund! Hoping to make it grow bigger!
    Hey, have you ever tried taking magnesium for your anxiety? I have found it helps me A LOT A LOT A LOT. If not, look for magnesium citrate; it’s the most absorbed by the body. :-) Thanks for linking up at Frugal Fridays!!
    Ann recently posted…Where Am I Important?My Profile

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