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Starter emergency fund explained and some ideas on ways to save for it. (Baby Step 1)



Simply put, a starter emergency fund is a little buffer between you, and the curveballs life throws at us. It is a fund for unexpected emergencies that pop up at the most inconvenient time, which is the last thing you want to deal with, especially when you are trying to get out of debt.


Dave Ramsey recommends saving $1,000 as your starter emergency fund. The idea behind it is not to provide a cushy cushion but rather be a safety net you can fall back on in case of an actual emergency while you are making progress knocking down debt. 


This amount makes some people nervous, and there are some valid reasons, in some cases, so I will say if your job or income is precarious right now, then it may be a season of stacking up cash rather than knocking down debt, but that's a whole different topic. You have to honestly evaluate your circumstance to determine what is best for your situation. I say "honestly" because we can play games in our minds and convince ourselves that "now is not a good time to get out of debt because..." and prolong the freedom you desire and deserve with being debt-free. 




Where should you keep your starter emergency fund?


You should keep your starter emergency fund in an account that is easy to get to like a checking or savings account. However, be sure that your starter emergency fund is not in a place that is so easy to access that you are tempted to use it. I kept mine at a completely different bank than my everyday bank accounts so that it was more of an out of sight, out of mind, but I knew that it was there if something urgent came up.


So what is a TRUE emergency? 


Well, it could be several things, but to classify it as a real emergency, it should be necessary, urgent, and unexpected. Some examples would be:


  • Your tire was punctured and is not repairable and therefore need to buy a new tire(s).
  • It's the middle of July, and your air conditioner isn't cooling correctly.
  • An emergency medical expense.
  • You are in a car accident and need to pay your deductible to get your car repaired.
  • Unexpected travel for a family crisis.

What is NOT a TRUE emergency?


  • An oil change
  • Back to school shopping
  • A copay for an annual doctor visit
  • Birthday, anniversary, baby shower gift, Christmas, etc.
  • Family vacation

Ways to save $1,000?


  • Budget, you will be surprised at how much money you might find when you are more intentional with your spending.
  • Sell stuff, look around your house, and have a garage sale or list items on Craigslist, Facebook Marketplace, or other similar sites. Do you have an extra car? Sell it. As Dave says, sell so much that the dog thinks he's next.
  • Take on a side hustle like a part-time job.
  • Start a side business. Are you crafty? Sell on Etsy. Walk dogs, offer to babysit, power wash sidewalks, or mow lawns, to name a few ideas.

The list could go on and on, be creative, think outside the box, a little here and there quickly add up and before you know it, you will be on to the next baby step.  Oh and don't forget, if you have any questions feel free to contact me in the comments section or email me at tiffany.valeriofs@gmail.com









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