HOLY EMERGENCY FUND! I never thought we would get past Baby Step 3. I am talking about Dave Ramsey’s Baby Steps to Financial Success. We have been following Dave Ramsey’s plan loosely for about 8 years now but pretty seriously for about 3. Baby Step 3 is to have a fully funded emergency fund.
Fully funded means 3-6 months of expenses set aside in case of an emergency. My original goal was to have it fully funded by September 1st , but we actually didn’t get there until December 1st . Three months doesn’t seem like a big deal in the grand scheme of life, but it felt like forever for me since we had a ton of setbacks along the way.
LUCKILY the setbacks were nothing serious (like medical bills) but just “life” happening as it does. Car troubles, home repairs, etc.
The hardest part for me is that my husband and I are not always on the same page with money. He doesn’t believe in “saving for the future” where I want to save to alleviate stress and anxiety that I associate with lack of money.
One of our biggest setbacks in the 15 months it took us to build our emergency fund was a trip my husband took to Ireland for a month. He planned far enough in advance to save enough money for the trip, but ended up spending twice as much as budgeted. His reasoning is that he was only going to be there once so he wanted to do whatever he wanted while he was there.
I have a different mentality in that if I get to do something awesome, I have to give up some of the luxuries in order to get to have the experience in the first place. For example, if I am paying for a race far from home, I typically bring all my own food and sleep in my car to offset the cost of the race and gas to travel.
Another issue that came with the same trip was that he got a big bonus from work that he was going to use to paint the house. When he decided he wanted to use it for his trip instead, that was fine. It was his bonus he could spend it as he chooses.
I just mentioned that since he was using it for his trip, we couldn’t get the house painted until next year when we saved for it. He agreed. Until he came back from his trip and said we had to get the house painted. Again, I would have waited and saved, but he said it was important to the longevity of the house and if we waited we would have to replace rotting wood, etc.
At times it was frustrating since we have different philosophies about money, but in the end we accomplished our goal…a fully funded emergency fund!! On to Baby Step 4 which is to put 15% of our income into an IRA.
This has also been a cause of friction between us, but in the end, he trusts Dave Ramsey so he is moving on to saving for our future. By this time next year my goal is to have our IRAs maxed out each month and be paying double on our mortgage each month (which is Baby Step 5).
I can’t wait to feel relaxed and secure in our financial situation. This is a far cry from the way I felt even 5 years ago and am grateful for all I have learned from Dave Ramsey along the way.
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Here’s to a prosperous 2017!!
See you soon!