What is an Emergency Fund?

When Life Hits

We’ve all been there–life is going well, work is slowing down, we’re able to spend a date night with our spouse, our kids greet us at the door when we come home, it even seems as if the sun is shining a little brighter on us as we go about our day. Then, it happens…

The check engine light on the car lights up. The microwave went out. Your spouse needs an emergency root canal that is already making our wallet cry a little. A family emergency occurred back home and suddenly we need to try to get the next flight back home to ensure we make it to our family in time.

I can say from personal experience that I have encountered every one of these scenarios, and many more. If you have every experience this type of emergency, I can also assure you that you are not the only one. Even if you have not yet had to deal with an emergency like this, it is very likely your time will come. How will you be ready to handle the challenge?

When life kicks you while you’re down, an emergency like this can seem crippling. When you’re already dealing with the normal stressors of work, facing a deployment, expecting a child, moving, or any one of the million things in life that can grab at our attention, an emergency can truly seem like the world is ending–but this doesn’t have to be the case.

Turning an Emergency into an Inconvenience

What if I told you that there is a way to turn an emergency into a simple inconvenience? What if there was a way that we could simply shake our head at the check engine light, but not have to go down the slippery slope of worrying about whether or not we can afford to repair the car or feed our families at the end of the week?

The truth is–you can take on life and turn an emergency in to a simple inconvenience through a simple financial practice called an emergency fund. Perhaps this seems so simple that it must be a trick, or have some kind of catch to it, but it really is as easy as it sounds! An emergency fund (sometimes called a “rainy day” fund) is simply money you put in to savings that is dedicated to paying for an emergency when the need arises.

Breaking the Paycheck-to-Paycheck Cycle

The biggest concern I hear from people is that there is simply no way a person can save for an emergency fund.

“If I am living paycheck to paycheck, how am I supposed to get any extra money set aside for an emergency?!”

First, let me tell you–I have been there. The worst part of it all is this: when you finally feel like you are getting traction, and life knocks you down again, it is easy to want to simply give up, lay down, and let life continue beating you down.

I kept this mentality for a long time, until I finally came to the realization:

I may not be in control of my present circumstances, but I am in control of my future.

If you are feeling the pressure of the paycheck-to-paycheck life, I understand. I have been there–but I have also found a way out. If this is where you are, take the above statement, write it down, make it your personal mantra. You may not be in control of what is going on around you right now…but you can change the way you respond to it.

The Bottom Line

Life will happen. I guarantee you that when it does, it will be expensive, inconvenient, and frustrating. But you don’t have to let life kick you while you’re down! While you may not have control over your circumstances, you do have control over how you will respond. Having an emergency fund in place will give you the peace of mind that you and your family are going to make it through anything life throws at you.