Protect Your Financial Future – Establish Strong Savings

One of the most important things that Jenn and I did to gain financial freedom was to begin thinking about and planning for the future.

It was a recognition of these basic FACTS:

  1. The future is coming.
  2. Life will happen.
  3. It will cost money

Based on these facts, we could choose 1 of 2 responses:

  1. Have zero money saved and use debt to pay for those life events OR
  2. Save money in advance and use that money to pay for the life events

Prior to December 2, 2002, we chose Option #1.   Every single time the car broke down or needed tires, we used debt to pay for it.   When we had to go to the doctor, we financed it.   Vacations?   All of them went on the credit card.   Christmas – all of that went on the credit card – with the excuse that we would use our tax refund to pay it off.   Never happened.

Option #1 is rife with stress, frustration, and anxiety.   Always fearing the next big calamity.   I am so glad that we have chosen Option #2 for the past 8+ years.

GOAL: Save at least $2,500 in a basic emergency fund.

EXTENDED GOAL:   Save at least $10,000 in a fully-funded emergency fund.

Have YOU protected your financial future?   Are you preparing for it by saving?   Share your story in the commments!

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1 Comment

  1. Travis on January 25, 2011 at 7:40 pm

    here is what I found.. after you have your savings built up, it seems that the number of “emegencies” went down a lot.

    We still have things pop up but because we can weather them, we just don’t get the emotional rollercoaster of having both an emergency AND a money crisis at the same time. (takes off some of the stress)
    but… I still hate when we have to spend out of the emergency fund but at least it’s doesn’t convert into 18% credit card interest (anymore)

    by the way…. if your emergency fund takes 5 steps forward and then has to take two steps backwards. Give yourself credit… that was still 3 forward of where you use to be!

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