Why You Might Not Need an Emergency Fund
This is a BOLD statement, I get that. But do you know why I say that? I think when we have a large buffer sitting in our bank account we become compliant and lazy with money.
When I only had $2,000 in the bank as my buffer when I was paying off debt that scared me. I was constantly thinking about some possible emergency that could happen and I would be screwed.
But do you know what happened? Nothing, I just worked my tail off to get out of debt so that I could start saving for an emergency and feel safe again.
Saving for an emergency was important to me because I wanted to know that if something happened, I was prepared. If I lost my job (which unfortunately we all know too well right now) I had time to find something I loved doing versus reacting to my new situation.
Don’t get me wrong, you should still have some money saved up while you are paying off debt, but let’s not save 3-6 months just yet
Here’s what you should do:
Save $1,000 for each member of your household before tackling debt
Once you have your minimal emergency fund, stay focused and on plan to pay off your debt
Once you are debt free, save 3-6 months of expenses and set it aside in a high yield savings account for a higher interest rate
