Originally I had hoped to create a 1k EF this month, but I likely will not make that. Some of my household bills were higher than I thought and there were fewer hours at my second job than expected. Considering everything else I have accomplished before the end of 2014 I am ok with this. Hopefully I will be able to put something in my EF to at least get it started, but I am not sure how much I can contribute yet since I still have one more paycheck on the way and I am hoping to knock out that title loan. Regardless having the idea of a 1k EF floating in my mind solidified an EF as something important that I have no choice but to create.
After pondering my own expenses and reading On My Own Two Feet 2nd Edition by Kedar and Thakor I have decided that my EF needs to be a minimum of 2k, so that will be my starting point for 2015. When I think back to the financial emergencies I have had over the last 10 years most of them were under 2k so having that amount on hand would be great. I also realized that I can raise my insurance deductibles, therefore saving on the premium, and put more money toward debt repayment. No longer am I the gal that can barely scrounge up $500, because I am becoming the gal who planned ahead and had her deductibles waiting in the wings. Of course I realize emergencies are not just insurance deductibles so my long term goal in 2015 will be to get 5k in my EF.
I am going to try to keep it simple and just pick an amount each pay day to transfer into it after I have covered bills and debt repayments. Since I am avalanching my debts the amount I contribute to my EF will likely go up later in 2015 and I want to add part of my tax returns as well. For now I am going to put my EF in my general savings account, but at a later time I might be able to move it to a money market account and get a better interest rate.
Predicaments and Precautions
December 24th, 2014 at 07:32 am
December 24th, 2014 at 02:51 pm 1419432689
December 24th, 2014 at 04:07 pm 1419437274
December 24th, 2014 at 05:39 pm 1419442774
Online savings accounts pay comparatively high rates, and most have no minimums to boot. GE Capital is paying 1.05% right now. That is the best rate of which I am aware.
Why not open an online savings account with $1 today, just to get it set up?
You've made a lot of progress already, I predict 2015 is going to be a great year for your finances.
December 24th, 2014 at 11:36 pm 1419464210
December 25th, 2014 at 12:51 am 1419468693
I'll admit I hadn't considered an online savings account since I'm not really into online banking. Is it just me or do they not seem like real entities somehow? Then again I wonder the same thing about amazon. How can a business be an actual business without a location I can just go into? I find it very comforting to go into a branch and do something or handle issues/complaints rather than getting lost in some email blackhole or be on hold on the phone forever.