Those of you that have been following this blog for awhile know that near the start of a new month, I like to post an update of any financial goals I’m working towards. Currently, Kirk and I are working on funding an emergency fund totaling six months of our living expenses.
As you can see from the below chart, we’ve made steady progress on this goal over the past seven months.
It’s hard to believe that we’ve come this far over the course of one year. At the beginning of February, 2011 we began tackling nearly $26,000 in consumer debt. At the time, we had about $11,000 in emergency savings. We decided to use over half the balance of our emergency fund savings to get a jump start on the debt repayment plan.
We were so focused on getting the debt paid off quickly that we exceeded our planned payoff date by three months! Unfortunately, I can’t say we’ve maintained the same intensity while building our emergency fund.
Don’t get me wrong, we’ve still been diligent about saving money, but we didn’t necessarily go above and beyond like we did while paying off the debt. For example, we used our December e-fund deposit to plan a trip to Captiva Island, FL.
I was distraught about the decision at the time, but in retrospect I’m so glad we planned the trip. The trip is coming up in a hurry and the kids are so excited. And there have been some impending changes in my world over the past month. Given the uncertainties these changes will bring, I would have never planned the trip had I waited.
But, I digress…
If everything goes as planned, we are less than one month away from meeting our emergency fund savings goal of $20,000.
The primary purpose of this savings is to allow our family to live and pay all necessary expenses for up to six months in the event that both Kirk and I were not earning any income. We would have to suspend contributions to our Roth IRA, vacation savings and 529 account’s for the kids, but we would be able to cover our mortgage, utilities, car insurance, groceries, etc.
The savings could also be used to fund other unforeseen emergencies like house or car repairs, medical bills and other unplanned expenses.
Once we have our emergency fund fully funded, we plan to save up enough money for Kirk to buy a used car (his is aging quickly).
We’ll just have to see if life has the same plan in mind as we do!
What financial goals are you working on lately? How are they coming along?
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