Did ya know April is Financial Literacy Month? Pretty neato if I say so myself. So let’s talk about building an emergency fund.
Budgeting and learning about personal finance have been game changers for us personally. You probably know we started with the Dave Ramsey FPU class, but in recent years we’ve distanced ourselves from the company due to discriminatory and problematic policies/views. We do still follow the Baby Step plan for personal finance (for the most part) though. It’s what got us out of approx. $130k in debt.
Often with personal finance, it’s a matter of not knowing where to start, coming to terms with your situation, and getting organized. That’s why I still like the Baby Step plan. It’s clear and doesn’t try to do too much all at once.
*And it’s also important to acknowledge the wide range of external, systemic, and personal factors that affect a person’s ability and chances of success in doing these things.
But if you’re looking for a general place to start with organizing and managing money, here’s a good first step (Baby Step 1):
Build a $1000 (or $500) emergency fund.
The idea is to get this in place as quickly as possible so that when something unexpected comes up, you’re not putting it on a credit card (i.e. going into more debt).
We keep our emergency fund in a separate savings account at another bank (credit union). This way it’s harder to access and not being used for things that aren’t actual emergencies.
This step isn’t super exciting tbh, but it’s an important one. Consider the below:
- What are some ways you can work toward prioritizing an emergency savings?
- Are there any areas where you can cut back spending or ways you can increase your income?
- Starting a budget will also help you see how much $ you have left over at the end of the month to put toward your goals.
Once you get your savings in place, try not to spend on credit cards anymore. Unless you’re one of the few ppl who actually pays off the balance monthly – ok do you. Deciding you want to stop wracking up debt is part of the first step.
*Make it a priority to rebuild the emergency fund if you take money from it. 💸
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