Many people I know don’t have one of these. $1000 in a bank account that isn’t easily accessible, that you can go to if needed. I do. And I’m glad.
I started mine last summer because I had two fairly large chunks of money come to me – retro active pay from our wage contract, and a “medical” benefit that came into existence. I didn’t use it for medicals – I used it for stress relief!
Yesterday I came to the conclusion that I needed to buy myself a video recorder. Nothing fancy, mind you, but something that I could use to record my practicum teaching on Monday. I got one. Nothing fancy, but it does capture my voice and my actions and that’s what I needed. I also needed to buy a memory card so that I can record the full hour that I’ll be teaching on Monday, but that was on sale at another store. All in all, I spent under $100.
But it was an unexpected event and I did not want to use my credit card or my line of credit.
I took the C-train down to the end at Somerset where there were 3 stores for me to price-check. I made my rounds and decided on this one, mostly because of the price. It’s also nice and small and it takes still pictures as well, which means I don’t have to take my camera along. The camera came from Futureshop and the memory card came from Staples. Then I had to go back to everyone else and tell them I didn’t want what I had set aside (just in case someone else was in the same dire straits as I)
I did use my line of credit to pay for the camera, but I have $100 coming from ING to pay it back. That’s why I’m happy this morning!
Some people, and Dave Ramsey (Total Money Makeover) recommends this, don’t add to their $1000 emergency fund until after the debts are paid off. I’ve chosen to automatically transfer $10 per pay period to that account. I still have the $1000 I want to have there, with a little bit to spare. Somehow, in my head, I need it to stay at $1000.
If you don’t already have such a cushion socked away, start today. It is very stress-relieving to know that an unexpected need isn’t going to blow your finances off track.
Now, back to making breakfast!
Have a great Friday, and if I don’t post before Monday, a great weekend.