Why do we have an emergency fund? I have found that with our variable income, we need an emergency fund more than people with a weekly paycheck. In slow months, such as January and February we fall back on our emergency fund to pay bills and make it through. In my mind, this is an emergency funds purpose.
However, this leaves us with a continually fluctuating fund. For the last two months, income has been slim to non existent and the fund has dwindled down to nothing. Now that March is here, it looks like things are picking up again so I will start rebuilding it.
My hard and fast rule is that 10% of all income goes into the fund. It doesn’t matter if we sell a horse worth thousands or a saddle for a hundred, 10% goes into savings.
Then I snowflake money into the fund as well. Snowflaking is fun. When I save a few dollars at the grocery store with coupons, I put that money into the fund. If I have money set aside for something and I don’t spend it, I transfer that money into the fund. It’s usually only small amounts but it builds up quickly.
I save my change. Every night when we come in, R and I put all our coins into a jar that eventually gets counted out and added. I also put any one dollar bills that I might have into the emergency fund.
Being forced to drain our fund is discouraging and I have to remind myself that this is why we have it. Building it back up is a challenge and it’s kind of fun. It’s very rewarding to watch it grow again.
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I know just how you feel. I HATE having to take anything out of my emergency fund. But it looks like I’ll have to at some point this month.
I too was discouraged when I had to use my emergency fund (due to knee surgery). That fund saved my butt, so I’m dedicated to replenish it. I put a portion of each pay into that account — feels great!
It is discouraging but it is also so empowering to know that it’s there when you need it. And yes, it feels GREAT when you can watch it grow again.
I think 10% is a great number to put into an Emergency Fund. And yeah you just gotta remind yourself, thats why you built up that fund in the first place.