save $1,000 in an emergency fund

I keep $1500 actually in a savings account, separate from my day-to-day chequing account. My income tax returns go in there too, and I don’t touch that account. It’s comforting to know that it’s there, just in case.

Bear with me, I’m thinking aloud. This entry might have been useful had I recorded my totals about a month ago. But I recently took a trip to visit the fam in California. My visits to the family are one of the few times per year I actually purchase new clothing, which has been desperately needed. Especially underwear. You don’t want details. Last weekend, I spent about $245 on unmentionables, a business suit and two dresses, which is nearly half my annual clothing budget.

According to my accounting software, I have spent about $260 of my annual $600 clothing budget this year. But I guess it’s almost the end of June, so I shouldn’t feel too bad about it.

Today, I was staring at my credit card total of about $830 (that’s all my monetary debt in the world). I couldn’t stand it. I pulled $100 out of my savings account and $40 out of my “fun stuff” account to pay it down. I have some actual cash lying around, too. I’m trying to decide whether I will deposit it tomorrow to cut the debt down another $100, or use it for my weekend expenses (which means I would have a harder time tracking expenses with my software).

In about a week, I get paid, and I can pay the rest off really easily. But for the first check of the month, I also try to set aside money in the savings, fun and travel budgets. That leaves very little for cash on hand until the second check of the month. Maybe I have to rethink my strategy, or perhaps, set up YET another sub-savings account as the REAL savings account for this goal. Yikes!

Perhaps an even easier thing to do would be to cut expenses. I’m back up to my pre-tracking spending levels….

I know that I’m over $2000 and possibly up to $3000. I’m in debt on my house (fell into thinking borrowing on my home was OK…NOT!!!). I keep thinking there must be a way to “get there” more quickly and that’s flawed thinking. So, day by day, month by month, getting there.

So, financial gurus are all about saving six to eight months of your expenses for an emergency fund. If I scrimped, I could get to that amount in five years—- and those are five years with some expected expenses (I expect my 11 year old car may crap out on me sometime in that time, and I’ll probably move again).

There is also something about keeping that much money sitting in a savings account with a pretty tiny interest rate that makes me uncomfortable.

Ultimately, my emergency fund goal is to have three months of emergency funds available immediately, with most of my savings in better investments than a savings account. I figure three months is a long enough time to free up some other of that money.

What may be obvious is that I neither have six months of emergency funds, nor three months of emergency funds. But this long term goal needs to start with the first, swallowable step. Hence: $1,000.

Most of the $1,000 came from saving 10% of my paycheck which arrives biweekly at $80. I saved my tax refund which made me reach $1,000.

and kind of keeping it a secret from my husband!
ideally i’d prefer this fund to be more like $5,000.
eventually…

I had $400 saved earlier this year but ended up spending it. Now I’m back to square one. It’ll probably be a little while before I can start adding back into my fund, especially with my vacation and the holidays coming up. Hopefully I can do this in the early part of 2008.

I have $150. XP Ah well I might not reach this goal…yet.

Yes, I have done it.

I think I might have made this… depending on the balance of my savings and the exchange rate… I’ll check for sure later today.