I think the beauty of blogs is that they help to capture a certain time frame in someone’s life. I’ve never really kept a diary in my life (too afraid my mom would find it!) so now I have something that I can go back and read about how much things have changed. One such area that has changed is our emergency fund.
Back when I started blogging, I was stubborn and nothing was going to get in the way of us paying off some debt! I couldn’t justify having an emergency fund back in April of 2006. If something came up, I planned on using our credit cards.
Seven months later, I was lured into into the online savings account arena and I deposited $100 into Virtual Bank and received a $20 bonus. I was going to stop there with our emergency fund.
Then January 2007 rolled around. We finally were able to afford health insurance and the payments were around $350/month payable every two months. That meant we had a $700 payment every two months. That’s a big chunk of our income and it was difficult to budget for at first. To help make sure we could always meet our insurance payments, I decided to increase our emergency fund balance to $350.
Just a month later, I got a little crazy. I was going to save $2,500 in our emergency fund. We got close to that goal, but a series of events depleted it to around $700.
Not too long ago, I deposited a little over $50 to our savings account to put the balance at $1,000. That is where it still is today and it will sit there until we absolutely have to use it.
Where will our emergency fund go from here?
That is a really tough choice. On one hand, I really want to reach the halfway mark with our credit card debt ($18,807). We are $893 away from reaching that mark. On the other hand, if we will be moving in the near future, we need to have some money saved up.
I think for the moment, we will not send extra money towards our debt. Instead, we will aim to increase our emergency fund to $1,500. Once that is reached, we’ll figure out where to go from there. Our emergency fund will continue to evolve.