The Evolution of My Emergency Fund

My emergency fund has gone through a bit of an evolution since I started it. At first it was non-existent.

I didn’t have an emergency fund in University. Money was tight, and I was more concerned about having enough money for rent, than I was about putting money away for a rainy day.

That all came to a screeching halt when I got in a car accident in the Summer of 2011. I was fresh out of school when I totalled my husband’s car and we didn’t have any money to fall back on.

The month that followed was anything but smooth. We had to deal with replacing the totalled car and a dozen visits to the doctor as my broken wrist healed. I missed time from work, and we both felt the financial strain.

The Origins of my Emergency Fund

Once that ordeal was over, I vowed to never again be caught so unprepared. So, I opened up my very first Tax Free Savings Account, and started saving. I still remember transferring that first $25 into that account.

It looked so pitiful, all alone in there. What good was $25 going to do in the event of an emergency?

But I kept at it, and over time that $25 grew to a few hundred dollars. Eventually I had around $400 in that account. $400 better than nothing for a first time saver like myself, right? I really wanted to get over a grand in that account though, so I kept up with my little $50 and $100 transfers, and my account slowly but steadily, grew.

My Baby Emergency Fund

My emergency fund finally got to the point where I could actually start using it about a year after I established it. It was sitting at about $1,600 at that time (I was aggressively paying off my debt, and slowly building my e-fund) and our new (to us) car needed some repairs.

No problem, I just pulled from the emergency fund. That’s what it’s there for right? Unexpected car repairs definitely count as an emergency. Just like an emergency fund for a car, companies like Insure 4 a Day can also help you insure your car when your car is in the shop.

It felt so good be not be totally thrown off course by a $300 car bill. Instead of looking at that bill in terror like I used to, I could just calmly say “I’ve got money for that”. What a revelation! Of course, as soon as I withdrew the cash, I wanted to replenish the account right away, and I did.

My Teenaged Emergency Fund

I’ve continued to add to this account (with some help from my husband) until it sits at a very respectable “Baby Emergency Fund” size of $2,200.

My emergency fund evolution isn’t done yet though. Once my debt is paid off, I plan on growing my baby emergency fund into a full-blown, healthy, “grown up” emergency fund. Instead of a small $2,200 in savings, I want to have 3-6 months of living expenses socked away, to insulate me from the lovely surprises life throws our way sometimes (like car accidents and broken wrists).

It’ll take a long time to build up this kind of cushion, but I’m not put off by that, I’m no stranger to saving. It’s going to be wonderful to finally build up some cash reserves instead of paying off dumb old debt.

My emergency fund started off small, but we all have to start somewhere, right? I have big plans for my emergency fund.

I’m curious, how much cash do you have set aside for a rainy day?


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