The importance of an emergency fund – 1500$ and the ability to deal with whatever life throws at you

A while ago I started a Money Series on the blog, and if you read the blog post and tried to budget for a month, you have successfully finished Step 0 – Now you know what you’re spending money on. If you didn’t, you could start now as the month has just begun.

Step 1 is one of the most important and life-changing ones. The Emergency Fund. It’s usually a sum between 1000$ and 1500$ (it’s the average amount that could cover almost any type of standard emergency), but depending on your currency you might just settle for something else. For us, it was 5300 RON. And it was a painful experience, but worth it. It was a test of our willpower and our relationship, and obviously, we passed.

What is an emergency fund?

Is a sum of money you have available for emergencies, obviously. But you have to be very strict about what constitutes an emergency. If your car breaks down and you cannot move around without it, that’s an emergency. If you have an accident or someone gets sick, if your pet needs an urgent trip to the vet or if your washing machine breaks down, and you have three kids, then you’re probably in trouble and need money. But the launch of the new iPhone or a meeting with your friends can wait until the end of the month.

Why is this Step 1 when you have debt to pay?

When you start saving money or paying off some debt, you need to be focused on that and anything you have at the end of the month will be sent to that fund. You do that by planning and budgeting, so if something like an emergency comes up, your entire plan has to change, and your life is turned upside down. You need to focus on the task ahead without any distractions. That’s why you need a separate fund to deal with whatever life throws at you and still keep up with your planned budget for the month.

You won't see progress in your savings or debt repayment if you keep getting money back out to deal with emergencies. Click To Tweet

The importance of an emergency fund. Dave Ramsey's Step 1 into financial freedom.

Why is this worth it?

S#!t happens. People get sick; accidents might happen to anyone; cars break down.

When unexpected things come up, your life is usually severely disrupted. Considering the level of stress you would be experiencing, the last thing you want is to also stress about money. Click To Tweet

“How do I get the money for this?”. Don’t be that person. And even if you are (we’ve all been there), you might start to consider that what I’m saying here makes sense.

The last time we had an emergency ourselves was at the end of last year when Leona the Beagle was attacked by another dog at the park. It was pretty serious, but the vet was close to the park where it happened, so Alin acted quickly. When you see blood and a terrified injured dog, the only thing you think of is to do whatever you can. There is no time to start thinking if you have enough to cover the surgery or make phone calls to ask someone else for money. You need to have something ready, so your dog can live. Our vet is very professional, but I know of others who ask for the money upfront otherwise they won’t do anything.

How do I get this fund?

It’s for emergencies, so you should build it up as soon as possible. I think we managed to get it in about two months, with a lot of sacrifices. When building the fund, this has to be your primary goal; everything else is second place. Keep your recurring bills of course, but minimise everything else. We stopped going out for a while, started cooking our meals instead of buying for the work week lunches, didn’t have any takeaways, walked as much as we could so we wouldn’t pay for transport, went to my mom’s place and got food during the weekends, we sold stuff around the house. Crazy times! We lived with the bare minimum and maybe less.

A birthday party came up while we were saving our emergency fund. We didn’t even buy a gift; I made it myself. We stayed at the party for longer than we planned so we couldn’t get the tube back. I cried when I realised we would need to get a taxi. With all the sacrifices we were making, getting a taxi seemed like a luxury. But we didn’t have a choice. 14RON that could have gone towards my 5300 went to a taxi driver. We were heartbroken.

The habits from Step 1 will help for the rest of the journey

During the time you build up your emergency fund, you’ll learn all sort of tips for saving money because you kinda have to. All this knowledge will help with Step 2 (get rid of debt) and 3 (increasing the emergency fund) and it won’t seem so hard anymore. I’m going to try to post a few tips on saving money on the next “episode”. And if you liked this post and you’re determined to make some changes around your finances, have a look at my e-book. It’s more than a budgeting and personal finances e-book, it’s full of wisdom you can apply in all areas of your life.

I talk about this and much more in my e-book. Click on the image to learn more

So what do you think? Will you start an emergency fund? You can do it as a challenge – how fast can you build it up? And if you have one, how long did it take you? Do you have any stories about it?


  1. Emergency fund is such an essential for everybody to have! And so many don’t have one!

    1. Author

      Yes, it’s like a snowball!

  2. this post educates me on financial front . A very much needed area Thank you

  3. This is a great post idea! Everybody needs an emergency fund stash somewhere but yet a lot of people don’t do it

  4. It’s surely a good idea.

  5. Thanks for sharing.. it is indeed for me.. 🙂

  6. Ugh an emergency fund seems like such a pipe dream right now. Definitely something to do when we have more steady income.

    1. Author

      Start small and then it will build up. I always think that money reproduces once you have some :P.

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