We saved a $10,500 emergency fund in about seven months!!!
We’ve been following Dave Ramsey’s Seven Baby Steps to Financial Peace for the past almost three years. Baby step one is to save a starter emergency fund of $1,000, which we officially completed last spring. Baby step two is to pay off all debt using the debt snowball method, which we completed in August of last year. (If you’d like to read more details about our journey to debt freedom, I posted reports almost every month. Start here with my first Money Makeover Challenge post.)
Baby step three is to add to the baby step one emergency fund – save a total of three to six months of living expenses. In our case, we chose three months of living expenses, which is $10,500 (rounded). We completed this step at the end of last month, March. I’m planning to move it to a money market account ASAP.
I’d also like to start contributing $1,000 every year that my husband and I have been married to our emergency fund. For example, our 10th anniversary is in a couple of months. We already have more than $10,000 saved. By June of next year, we should have $11,000 total saved for our 11th anniversary.
We’re now looking forward to contributing 15% of our income to retirement for baby step four and contributing to the kids’ college funds for baby step five (as soon as the corona virus quits reeking havoc on our world)!