When you are employed by a stable entity, you forget the importance of an emergency fund. Layoffs are rare, furloughs are few and far between…somewhat. You know that next paycheck is on its way. You get pretty complacent. When you are paying off debt, you might not feel like there’s room to build an emergency fund. There is minimal in any profession and having a cushion of at least 3 – 6 months is NECESSARY.

The Myth of Stability


Some professions feel more shielded and this will make you feel like you don’t need an emergency fund. That’s a lie. Some people believe they can dip into their retirement accounts when an emergency happens. This isn’t a great idea. If we have a recession, the “emergency fund” you had saved drops in value and lose these savings. Not to mention withdrawing from your retirement accounts comes with a penalty. This is true for most 401ks, TSPs, etc. Not to mention, usually, the emergency happens even if you haven’t received your early withdraw money yet! What if you don’t have available credit to cover the emergency until the check arrives! 

I don’t care if you’re self-employed, or an employee or what but you need an emergency fund. Even if your paying off debt, build that fund. It’s worth the peace of mind.

Funding Your Emergency Fund

Funding your emergency fund isn’t fun but having cash instead of digging for your credit card is worth it every time. When you get paid, route some of your checks over to your emergency fund. This is harder while paying off debt but completely necessary. Start with a small transfer of $25/month. If you don’t have an extra $25/m find one small item to sacrifice from your budget. An easy example, do you have a gym membership your not using, cancel it. Go for a walk outside or use free youtube videos. Get creative and find a free way to exercise for a few months until you have momentum.

One way I’ve worked to make extra money to pay off debt and for my emergency fund is through Poshmark. You can read about my Poshmark experience here

There is no wrong way to save for an emergency fund. Anything is better than putting stuff on credit cards. 

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