Emergency Fund... Check!

Although it isn’t one of my stated financial goals for 2017, I did reach an important milestone towards financial freedom today. We achieved Dave Ramsey’s baby step #1 today. We have $1000 in the bank to be used as our baby emergency fund. Obviously, it won’t cover everything, but it will cover most, if not all, minor emergencies.

Last month I paid off one credit card balance. Now, I need to sit down and really list our debts to decide how to pay them off. We owe several smaller debts (including to our kids, which we will pay last, I’ll explain that in a later post), and one monster credit card debt.

Until we fully decide how to proceed, I’m going to continue to pay the most money towards our credit card debt. I plan to list our debts and their amounts near the middle of the month.

In the past, Dave Ramsey and his baby steps really worked for us. I don’t know why we went away from them, but our finances definitely suffered for it. The baby steps break debt and personal finance down into manageable chunks. We don’t follow him 100% as we have debt but still continue to contribute to our retirement, but we definitely use his steps as our guiding principle of debt and finance management.

Baby step number 1: build a $1000 emergency fund, is complete. This will help to keep us from falling further into debt. If the washer goes out, we’re covered. If we have car troubles, we won’t have to worry. I think the $1000 is as much about peace of mind as it is about financial security. Not only will I not have to use my credit card as an emergency fund, but I have a little cushion between me and fear; a little cushion between me and uncertainty; a little cushion between me and sleepless nights. It’s not much, but it’s comforting nevertheless.

Now that we have reached this milestone, it’s time to really work on our goals. We want to squash our credit card debt, get $10,000 in the bank, and start living off of last month’s income. None of these goals are unreachable, but to achieve them will take hard work and discipline.

Slow and steady wins the race. We didn’t get into debt overnight so we won’t be able to get out of debt overnight, but we will get out of debt!