One of my main goals for this year is a financial one: save up an emergency fund.
Because I already hit my other financial goal for the year of saving up to pay the baby’s hospital birth bill, I’m now focusing on saving up our emergency fund. I set a goal of $10,000 and I’m sharing the first update on progress so far!
Our emergency fund goal is $10,000.
We had this amount saved once and it felt comfortable so that’s what we are aiming for again, but it may change once we reach it if we decide we want a little bit more. It feels more important than ever with our little one on the way, so I’m assuming it may feel better to have even more once she is here. This emergency fund would cover a few months of basic expenses like our mortgage, utilities, food, etc.
As you can see in the video, the emergency fund is currently a little over a third of the way funded. We are on our way!
We are currently throwing a decent chunk into it each month and will for the next couple months. After that we will have a new daycare bill so the savings will be cut in half and we will have to get creative with funding it by the end of the year.
I had planned to put our tax refund of a few hundred dollars into the emergency fund but ended up using that to help cover our $1,800 escrow shortage for the year so our emergency fund could stay mostly intact. We decided to pay the shortage upfront so our mortgage payment wouldn’t jump up too much when we are already adding new monthly expenses. We knew that we would have an escrow shortage this year because our taxes increased due to an increased appraisal, but the surprise/emergency was just how much they rose!
We also had to cover an emergency root canal expense in March. Dental bills aren’t fun and can sometimes be or feel like a surprise, but again, it’s nice to have the money to cover bigger expenses as they pop up when they aren’t covered by insurance.
Emergency funds are so important because they make you feel more secure and help you weather life’s financial storms and surprises.
After paying off my car loan last year I embarked on this year of saving money to help build up a layer of security and stability in our lives. We are only a third of the way to the bigger goal but I already feel a lot more secure knowing we can cover a range of smaller expenses. Having a more secure financial foundation makes sense as we invite a baby into our lives!
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