Recovering from an Emergency Fund Withdrawal

Recovering from an Emergency Fund Withdrawal

Recovering from an Emergency Fund Withdrawal | brokeGIRLrich

A few weeks ago we discussed the different times it’s totally ok to use your emergency savings and judging by the replies I got – most of us have tapped our emergency savings at one point or another.

So you’ve finally gotten through the emergency: your first paycheck is in from your new job, the car is repaired, the dental bills are paid. Now what?

Personally, I know I felt kind of defeated when I tapped my emergency savings to move to New York City. I had been so close to my $5,000 goal when that new job opportunity arose. I would up using nearly half of what I’d saved to pay first and last month’s rent and the security deposit on my new place.

It was the right decision and I didn’t feel like I’d squandered my money or anything, but it still felt pretty crappy to check out the new balance on my savings account.

So what do you do once the decision is made, the money is gone and the emergency has passed?  

Make a new plan. Previously, I hadn’t been funneling all that much into my emergency savings, since they were pretty close to where I’d wanted them to be. Before moving to the City, you may recall that my monthly expenses were pretty low. I was living on a train, for pete’s sake, and just had to figure out how to feed myself. $5,000 was a huge amount of money in a savings account with bills like those.

Then I re-evaluated with my new bills and realized I didn’t even have a one month cushion saved up with the expenses of my new lifestyle.

So my new plan had to be entirely re-thought out. I scaled back a lot and upped my frugal ways the best I could to maximize my savings each month.

I set two goal numbers for my emergency savings each month – my “must hit” number and my “ideal.” My goal was to get my savings back up to $5,000 by the end of the year and that meant saving about $250 a month, so that was my “must hit” number.

After that, I crunched some more numbers and realized that my ideal, while working within the constraints of my budget, was a lot closer to $400. That would only take me about 8 months instead of 12 to get back to a number I was comfortable with.

I know everyone is different, but I sleep a lot better at night knowing I have enough money to pay a few months of bills saved up in the event of a worst case scenario. I was all for accelerating to the ideal instead of must hit, but sometimes life throws you curve balls… or happy events like friend’s birthday parties and rafting trips with your family… so having both numbers in mind helped me balance my way back to a healthy emergency fund.

Also, I can be incredibly, psychotically a little impatient at times. So I found side hustling was my best friend all of last year. I mystery shopped my butt off, started freelance writing, figured out how to monetize my blog, built props and stage managed on the side. All of that money was able to go into hitting my different savings goals quicker (and to getting me to FinCon ’14, but that’s another story).

I genuinely believe there’s a side hustle for everyone and I say that as someone who spent years just feeling overwhelmed and confused by the whole idea of them. I collected 114 a while ago and I’m willing to be there’s one there that would work for you – or, even better, inspire you to come up with #115.

How to Rebuild Your Savings:

  • Create a New Plan
  • Set a Goal
  • Hustle, Hustle, Hustle

What tricks have you used to speed up achieving your goals?

13 thoughts on “Recovering from an Emergency Fund Withdrawal

  1. I had a huge hit to my emergency fund at the end of last year and it sucked to go through it, but it just motivated me to work harder toward achieving my goals. I am one of those people who gets motivated by the sh&t that happens in life because I know it all happens for a reason and the sooner I can take a bad situation and make it a good one, the better I feel.
    Shannon @ Financially Blonde recently posted…Music Mondays – SugarMy Profile

  2. Side hustling is how I’m putting extra money toward my debt, and now due to work changes at my FT job my side hustle is even paying for a (small) portion of my monthly budget each month. At this point, I have no choice but to keep side hustling. If I up and quit my side hustle today, I wouldn’t have enough for all of my monthly obligations, which is scary good motivation to get out of debt.
    Kayla @ Everything Finance recently posted…How to Tell When You Should Refinance Your MortgageMy Profile

  3. I get very stressed when I dip into savings of any sort That’s because our “savings” account is really just a fund for a major medical expense coming up. So it’s actively working against our goal.

    I’ve made my peace with it (mostly), but I imagine dipping into the emergency fund will freak me out. We may need to borrow $1,000ish to be able to pay in cash. Depleting savings *and* lowering the EF will take its toll. I’ll just have to funnel our efforts immediately into building it back up.
    Abigail @ipickuppennies recently posted…Home repair? The cheapest bid may be the worst oneMy Profile

  4. We just had to take a bit out of our EF and it hurts. You know that’s what the money is there for, but spending it was such a psychological drain!

    Also, your first last and security in NYC was about the same as ours in Pittsburgh. We probably got a little more space, but still, good find?
    Femme Frugality recently posted…Ding! Dong! The Debt is Dead!My Profile

    • Definitely a good find. I wasn’t really a huge fan of living in NYC, but as far as neighborhoods go, if I ever move back, it would probably be to Inwood. Definitely no further down than Washington Heights… it’s all a little too claustrophobic for me in midtown.

  5. Although it’s very anti-climatic I try to be disciplined when I receive unplanned/unearned money–like tax refund, Xmas money, etc., and put that towards a current savings goal or my emergency fund if it’s looking a little thin. Psychologically, it’s money I wasn’t counting on anyway.
    Brittany @ Fun on a Budget Blog recently posted…Financial Forecasting: Using a Financial Aid Loan Calculator to Strategize your Debt Repayment PlanMy Profile

  6. “Fix it as soon as possible,” I think. I’m still building my own EF, but when I’m “done” (with $5000 in there by September if all goes well) I plan to keep saving most of the $500/month I’m putting there now — I’m going to divert it to other savings/sinking funds. So, if I had to use it for something, I’d re-divert that $$ back to topping up the EF. I agree that windfall money (side hustle, tax refund, whatever) is also a great thing to put to rebooting an EF.
    C@thesingledollar recently posted…Personal Finance Bloggers Gone Wild: Spring Break EditionMy Profile

    • That’s true. I’ve found now that my emergency fund is topped off and I’m only putting $100 a month into it instead of working hard to get it up to $5,000, I’m able to save in other areas – which would be easy to divert into an emergency fund if necessary.

  7. Thank goodness you had that emergency fund and what would you have done without it! That’s what I always say when we use it. Emergency funds are a peace of mind. Like my Mother once asked my brother when he told her to just spend her money and don’t worry about it “are you going to replace my furnace when it goes out? ” He didn’t say a word.(ha ha)
    vickie recently posted…Free Kindle Books for Today 3/14/15 plus Rewards Saturday!My Profile

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