An emergency fund is something that I recommend every person starts out with BEFORE trying to pay off debt. An emergency fund is just what it says: money set aside for an emergency. The reason that you will want to start with this first, is because THERE WILL BE some type of “emergency” come up when you start trying to pay off debt.
Saving for a Rainy Day
Have you ever heard this expression? I’m sure we all have. I bet that most of us have heard it from our parents or grandparents. When you are setting aside money for a rainy day then there will be no rain – only sunshine. You will be filled with lots of sunshine knowing that you have the money to pay off that emergency and then you can just keep working towards your goal of paying off debt.
Use Only in Case of an Emergency
This saying can be found on the glass door of a fire extinguisher. Why would it say this? Maybe…just maybe they don’t want you spraying down the entire office with that white foam unless it is just absolutely necessary. Pulling out that extinguisher before needed would make a complete mess. It is the same when pulling out money for something that you think you “need”. Taking out that money for just anything could cause you to have more of a mess on your hands than you already do. Ask yourself this question before pulling money out of your emergency fund to make a purchase: “Is this a need or a want?”.
“Go to the ant, you sluggard! Consider her ways and be wise, which having no captain, overseer or ruler, provides her supplies in the summer, and gathers her food in the harvest.”
How do you think this verse relates to what I said above?