As the end of April approaches, my emergency fund is reaching its first birthday. It may seem crazy that I’m reflecting on something like an emergency fund, but its something that deserves a little attention. See, last year was my first year out of debt (as an adult). I wasn’t in too deep (only $25,000), but it felt like a big amount when I was underneath it. I was very weary of paying my debt off once I had the money because, like many people do, I really liked that cash cushion in the bank. Following Dave Ramsey‘s advice, I bit the bullet as soon as I had the full amount of both my car and student loans and wrote those checks out, leaving my bank accounts empty.
Building My Emergency Fund
Once out of debt, I kept focused. I was able to pile up a 6 month emergency fund in 5 months. I was very blessed to have been able to do that. Accomplishing it was due to the fact that I had lowered my expenses almost as low as I could and managed to get my income up in the meantime. Being recently out of debt tempted me to relax a little bit but I made myself keep my head down and not look up until my bank account had a cushion again. And it happened, in 5 months. That goal was achieved almost exactly one year ago.
My Year with an Emergency Fund
It’s been a crazy year. It’s been one of my toughest years ever personally as I dealt, and continue to deal, with some very tough personal family problems. They are very challenging but thankfully, I’ve learned how to better handle them as time has went on. It was a learning process that was very painful, stressful and full of anxiety. I’m on the other side of that though, even though the issues aren’t yet over.
On the flip side, this past year has been my most successful ever professionally and personally. I managed to increase my income, develop more professionally, move up in my company, lower my expenses, quit smoking, start running, start cooking more, eat healthier and start a blog. I saved over half of my income. I did some pretty awesome things. I’m proud of it.
How could an emergency fund have played a part in any of that? I’m not sure, but I bet that achieving the back to back goals of getting my butt out of debt and piling up a 6 month emergency fund had something to do with it. That journey of sacrifice, persistence, success and reflection made me feel like I could change anything. It made me want to continue changing myself for the better. Since I was out of debt and had an emergency fund, I now needed to quit smoking. I needed to start running. It motivated me.
The Options and the Dreaming
Having an emergency fund (and additional savings for that matter) gives you options. When you have options, you can’t help but dream. These dreams are really about your passion. For me they’re about being able to travel, see all the beautiful sights, starting a blog, buying a house, having a family someday, retiring young (if I want to), owning my own business someday and just being free from all that people get tied down to in life.
This year has been a year of dreaming. It’s been a year of contemplating all the possibilities for my future. It’s been a year of action, taking action to change my future. Most importantly, it’s been a year of progress. Here’s to the next year being a year of progress for all of us. I hope all of you and I can look back next year and point to the things we did this year and be proud of them!