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Emergency Funds are not Fun…but they’re important!

by J. Money on Friday, June 6, 2008

It seems like every time I get close to reaching my goal of 5k, something happens and I get thrown back a bit. This time around my emergency fund got frozen* inside my Home equity line of credit, basically leaving me with zero now. Since it was used to pay part of the 2nd mortgage (the heloc), it’s not like i really “lost” the money, but I still can’t tap it in case of an emergency. In reality, an emergency wiped out my emergency fund!

There IS a lesson to be learned here: Emergency Funds should be totally liquid, and accessible 24/7!

Lucky for me i’m a pretty positive guy, so as frustrating as it is, at least i am learning something :) There’s also something to be said from starting with a clean slate. Before this happened, I had accumulated $4,800, but slowly kept chipping away at it until it reached around $3,000. Then I had my “aha!” moment and started adding back to it. At this point, however, I kept thinking i was down 2k and couldn’t feel content until i was back at 5k. Thus, every time i added $ into it I couldn’t feel at all happy about it as I was just making up for it.

This time around, however, I will leave it alone 100% and watch it grow. So each time I add a little into it, I’ll be proud every time knowing that i’m that much closer to reaching my goal. Now I’ll be saving up, instead of catching up.

  • This year’s goal: To reach $5,250 (yahoo!) I’m fairly confident i can make this happen.
  • My ultimate goal: To reach $10,500, which is what i’d need to survive for 3 months. (scary huh? I am working on lowering this, believe me.)

You can track my progress on the status bars to the right which i update monthly. Let’s hope i keep pumping it up and reach my goal! Lord knows it won’t be easy…


*To read more on our heloc freezing up, read my operation heloc: the bad :( posting.
*To read more on why helocs freeze up to begin with, as well as some awesome commentary from users and how it affected them, read this article from The North County Times.


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