One of my favorite personal finance bloggers and BFFs offline is Mikhaila from A Fistful O’ Dollars. I really adore Mikhaila because she is smart, into fashion and frequently responds to my text messages with hilarious GIFs. But one of the things I admire most about Mikhaila is that she’s saved up a…
$10,000 Emergency Fund.
So awesome! Needless to say, I’m a tad jealous of that awesome financial security. I wish I had a $10,000 emergency fund! That about would be about 6 months of essential living expenses for me, and just seeing such a big beautiful round number of dollars would give me a daily dose of happiness and security. Alas, how was I ever going to accumulate that much in my Emergency Fund? I struggle to keep it at $3,000! I guess I’ll just be jealous of Mikhaila forever.
….or I could just figure out a plan and start working on a $10,000 Emergency Fund myself.
Because it’s not as hard as it looks at first glance. With some rough calculations I figured I could get my EF up to $5,000 by the end of this year, which means I’d only have another $5,000 to go. If I set my timeline to have a $10,000 Emergency Fund by 29 and contribute $250/mo, I’ll be right one schedule — I mean, assuming no emergencies make me withdraw some or all of the funds.
See? It’s not even challenging, it’s just a matter of setting up automatic transfers from my chequing to my savings account. The downside is I’ll have to wait 1.5 years to see the final result, but for a five-figure sum that’s not too bad. Like most financial goals, the number itself is intimidating the but the path to get there is pretty straightforward. I think I’m lucky that after so many years of blogging about money, an 18 month financial commitment to put $250/mo away is relatively easy. The hardest part is always building the habit in the first place, but once you’re used to giving up part of your income for paying down debt or saving for retirement, it’s just something you know how to do so you feel confident taking on something else.
This would provide me with 6 months of essential living expenses and probably solidify my eternal friendship with Mikhaila because few things say “I am a PF master” the way a $10,000 EF does.
Have you decided to take on a big financial goal? What’s your plan, man?