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.
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.
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!**