Emergency Fund: First Step to Debt Free!

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Emergency Fund, Extra Income, Financial Freedom, Personal Finance, Saving Money, Pay off Debt

What is an emergency fund? How much money do you need in it? Why do you need an emergency fund?

These are the things we are going to discuss and more. Our lives can be incredibly complicated, and things happen that don’t fit our master plan! We never know what is going to happen tomorrow, so we need to prepare for the worst.


To put it simply, an emergency fund is money that is set aside to cover all the surprises that life throws our way!

These unexpected surprises can be costly and quite stressful when they happen. Being prepared for them financially can make all the difference in how much stress we face!

An emergency fund is a protection! It is protection for our financial future!


We don’t always know what is going to happen. Being as prepared as we can be is the name of the game.

Here are just a few examples of what can go wrong:

  • Your vehicle breaks down, leaving you no way to get to and from work.
  • You lose your job or have your hours cut, giving you less income.
  • Emergency medical treatment.
  • You lose your lease and have to move unexpectedly.

Those were only a few examples of what can happen. The need for an emergency fund should be perfectly clear by now!

Read this article to learn about my over 1200 dollar vehicle repair! We also had to replace our washing machine recently. Our emergency fund covered both of these unexpected financial burdens, and therefore, we didn’t have to use a credit card to cover them!


Most financial planners recommend 3 to 6 months living expenses.

The fact is though, the amount we should have is different for every financial situation.

I personally will say a minimum of 1,000 dollars is needed. I plan to have four months of my wages saved up at a minimum once I get that far.

If you barely have 2 pennies to run together, like most of us, start with the 1,000 dollars I already mentioned. After you have that, build it up as you go.

For example, when I started this financial freedom journey, I saved up 1,000 dollars rather quickly and paid a little less to bills. Once I established my emergency fund, I started paying more to my debt and a little less to my emergency fund.


Going to lunch with your co-workers the day before payday is NOT an emergency!

Buying a new television because you want a bigger one is NOT an emergency!

Purchasing an expensive bicycle so you can exercise more is NOT an emergency! You should read this to see how I almost did that!

I think you get the point and know what is and is NOT an emergency!


1. Decide Where to Keep It / Keep it Liquid

As we previously discussed a few times, you never know when you are going to need to access your emergency fund.

You also don’t need to earn high interest on it, as this isn’t meant to be an investment.

So putting this in any account that has no fees and no holds on withdrawals will be fine.

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I personally keep my emergency fund in the exact spot where I save the majority of it. It takes 3 to 5 business days to get money to my operating account, so it is perfect for my needs.

You don’t want to be able to get it much quicker because this way you are forced to plan ahead and also you may be tempted to spend it on non-emergencies if you can withdrawal it quicker!

Where do I save most of my emergency fund? In my account through Digit. I can effortlessly save money with Digit which is why I love it! My absolute favorite money-saving service!

Check this out for more info.

2. Budget

If you have read any of my posts, then you have read this before!

I cannot stress the importance of a budget enough! Do you want to pay off your debt faster? You need a budget!

Do you want to save MORE money towards your emergency fund? You need a budget!

An effective budget will free up money in your finances that you didn’t even know you had! It will also help you realize where you are overspending your money or where you shouldn’t be spending in the first place!

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3. Start Saving Money

You won’t be able to save up an emergency fund if you don’t save money!

Your budget will help with this if you save up all the money you freed up with your budget.

Another great and effortless way to save money is Digit. It is absolutely my favorite money-saving service!

4. Prioritize Your Savings Goals

You need to pay yourself first!

Develop habits to save money and stick to them.

For example, pay cash for everything you buy, and put the change in a jar and don’t touch it for six months! That can add up to a substantial amount of money.

Maybe you can make an even bigger rule, such as any time you have a 5 dollar bill you put that away in your savings jar.

When you are just starting it is not about how much you save but more about the habits you form! Saving money is very difficult for some of us, myself included, due to our habits.

Develop some solid habits now, and they will pay dividends later!

Don’t forget to save money by signing up and utilizing Amazon Subscribe and Save Program! Check it out and see how much you can save to have your frequently purchased items shipped directly to you!

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5. Make More Money

Find some solid side hustles to make some extra cash!

If you are doing this with the ultimate goal of being debt-free, then extra cash is the way to go. Anything to make this journey shorter is invaluable!

One way I make an extra 100 plus dollars per month is by taking surveys on Survey Junkie! It can be time-consuming, but it is really simple!

You can also save money by using Ibotta when you shop! You get cashback on your purchased items. It is effortless. Just add offers you want to take advantage of in the app, do your shopping, and take a photo of your receipt when you are done.

There are plenty of ways to make money from home. You have to look for them. Find your favorite ways, make some extra cash, and ramp up your emergency fund savings!

See Cheap Tasty Meal Plans!

To Sum Up…

In my opinion, I don’t care how much money you make; we all need an emergency fund! Each and every single one of us needs some money set aside to handle those unforeseen circumstances!

For some of us, we need to find some creative ways to save money because we haven’t formed solid habits yet.

Don’t forget to check out Trim and 5 Dollar Meal Plan if you want to save extra money! They are all super easy to use, and you have nothing to lose to try them out! If you like them, cool, your going to save extra money. If you don’t like them, nothing is lost, you just stop using them. Easy as that!

YOUR TURN – What creative ways do you use to save more money? How are you doing on your emergency fund goals? Let us know in the comments!

One last thing. If this article helped you or inspired you in any way please hit those share buttons!

Survey Junkie

9 thoughts on “Emergency Fund: First Step to Debt Free!

  1. I totally agree with having $1000 set aside for small emergencies. But after getting debt knocked out, best thing you could do is setting aside 3-6 months worth of salary for those big emergencies (loss of job, medical issue, etc…)

  2. Absolutely agree with what you say and your input. An emergency fund is so needful when the reasons as you noted could come up. You just never know! Thanks for the informative and easy to follow post. Much needed!

  3. An emergency fund is super important because even a small unexpected expense can totally throw you for a loop. A $1,000 emergency savings fund is a good place to start and you can build on it from there using a high-yield savings account.

  4. I’m so happy that you are stressing the importance of having an Emergency Fund! You/We will ALWAYS have emergencies, it just depends on when and what kind of emergency. Be prepared so you can handle it without stress or debt!

  5. I have always been so bad with saving money. I know the importance of having an emergency fund but I struggle to save the money and keep it saved. Your articles are motivating me to push myself and I have already saved 500 dollars to my fund. I hope I can keep going!

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