Around the blog-o-sphere I have been seeing lots of money management posts. I have been secretly ignoring them but, then I read Off Track? Get Reacquainted With Your Finances Again and realized I need to give this subject some genuine attention.
A description of an emergency fund according to Dave Ramsey:
Baby Step 1 - It is a rainy-day fund, an umbrella. An emergency fund is for those unexpected events that are not regularly planned for happening in life - you lose your job, there's an unexpected pregnancy, the car's transmission goes out, or, or, or. This is NOT an investment or Bahamas fund! Before attacking Baby Step 2 (the Debt Snowball), save $1,000 as a baby emergency fund. A fully funded emergency fund is 3-6 months of your personal expenses set aside in a savings or money market account; build this up in Baby Step 3.
A rainy day fund is an insurance policy against financial disaster. When you're faced with a bill you could not budget for, the money is there. A rainy day fund will help you handle the various little events that occur. Do you have one? Is it big enough to cover financial stress? Are you wondering how to build an emergency fund when you don't have any extra funds? I sure am.
I listened to Dave Ramsey's audio book Total Money Makeover back in January and talked about my enthusiasm here. I liked it, I really did. It makes a lot of sense. But, here I am ... 5 months later ... and I am nowhere closer to getting to Baby Step 1. I've pared down my budget a few times over but, I still have so far to go to really making a difference. I need to take the next step (or in my case, Baby Step 1).
Reading I like:
How to Build an Emergency Fund When You Don't Have Extra Funds | Hearth Management
21 Strategies for Creating an Emergency Fund and Why its Critical | Zen Habits
What is No Spend Month? | Small Notebook
20 Pocket Change Date Night ideas | Small Notebook
The Emotional Benefits to Becoming Debt Free | Simple Mom