Are Emergency Funds Worth The Work? (2024)

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One of our goals this year is to fully fund our emergency fund. We almost had it fully funded a few years ago but had to use nearly all of it for, well, a huge emergency! Boy were we glad we had that money tucked away.

For newbies, an emergency fund is when you save 3-6 months of living expenses. If you unexpectedly lose your job, are injured, or have any other number of emergencies, you’ll have the money to get you through that difficult time.

Tuck your emergency fund away in a savings account and don’t touch it unless it’s absolutely necessary!

If you have debt, Dave Ramsey recommends having a starter emergency fund of $1,000, paying off your debt, and then fully funding your emergency fund.

I’ll be the first to admit that building an emergency fund can be a bumpy road. One day it’s smooth sailing and then the next day the air conditioner goes out (or any number of things). On one hand you’re thankful you have the money to pay cash to fix your air conditioner, but on the other hand you’re frustrated that your emergency fund is empty and you have to start all over. Trust me, I’ve been there!

Even though building your emergency fund can be a bumpy road, I’m here to tell you that it is worth all the work!

Why? I’m glad you asked!

1. You stay out of debt, or don’t go further in debt.
Just think about it. Prior to having an emergency fund, what did you do when you had an emergency? If you’re like most Americans, you borrowed the money or put it on your credit card. When you have an emergency fund in place, you no longer have to do that! (Plus, think of all the interest you’re not having to pay!)

2. You think outside the box.
When an emergency rolls around you can either use your emergency fund, or you can get creative and come up with a different solution to fix your problem. (There are times when you have no other choice but to use your emergency fund.) If you’re like us, you’ll do everything in your power to keep that money in the bank.

3. You have peace of mind.
Whether you have $100 or $10,000 in your emergency fund, knowing that money is there for emergencies gives peace of mind. As a woman, that is huge for me!

No matter where you are on your journey of building your emergency fund, I want to encourage you to stay the course. All of your hard work will be worth it!

Why do you think emergency funds are worth the work? (Please share in the comments.)

Photo Credit: Tax Credits (added title text box and ThriftyTsTreasures.com to original photo); Simon Cunningham; Tom Small cc

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Comments (10)

1. 

   Anne AsplinMay 5 at 4:36 pm - Reply

   I love Dave Ramsey’s advice. This post however does a great job in really discussing the importance of Step 1. Thanks for sharing!

   • 

     Tshanina PetersonMay 6 at 3:48 pm - Reply

     Hi Anne,
     I’m a huge Dave Ramsey fan too! I’m glad you found this post helpful.

     Thanks for stopping by!

2. 

   MandyMay 5 at 4:47 pm - Reply

   I think emergency funds are extremely important and definitely worth the work to set aside the money for them! My AC unit had to be replaced unexpectedly and it’s amazing how much less stressful those kinds of situations are when you already have the money for them.

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   • 

     Tshanina PetersonMay 6 at 3:51 pm - Reply

     I’m excited to hear that you had the money set aside to fix your air conditioner!

     Thanks for stopping by Mandy!

     • 

       KlissMarch 9 at 8:33 am - Reply

       You are so right for people (especially young people) to have an emergency account. The
       10-10-80 rule really helped me get started. 10% savings, 10% debt & 80% for the household. This rule can be changed in any way to your particular household or situation (10% savings, 20% debt and 70% household). Now when I really want something (optimal word is want) I save the money first and then go shopping for it. If it’s something I need, I try to find a finance program to pay it off without the interest cost and incorporate the payments into my budget. Every household needs a budget. Some people think they don’t make enough to have a budget. When I was on welfare I still had a budget and stuck to it.

       • 

         Tshanina PetersonMarch 10 at 4:16 pm - Reply

         You’re so right…most of the things we desire are wants and not needs. And, yes, whether you make $10 or $100,000 everyone needs to have a budget!

         Thanks for stopping by, Kliss!

3. 

   Becca @ Bare Feet on the DashboardMay 5 at 9:08 pm - Reply

   We’ve been on the Dave Ramsey plan for 4.5 years now, and the emergency fund is a lifesaver. Because we are debt free and have a 6 month emergency fund, I was able to quit my full time job to be home with my babies. So worth it.

   • 

     Tshanina PetersonMay 6 at 3:54 pm - Reply

     How exciting that you are able to stay home with your little ones. That’s definitely a blessing from the Lord, and what a great story to share with others!

     Thanks for stopping by Becca!

4. 

   AashiJuly 5 at 12:12 pm - Reply

   building emergency fund has been on my to do list for quite sometime now but always ignored it. I’m definitely putting it on top priority after reading this :)

   • 

     Tshanina PetersonJuly 5 at 8:02 pm - Reply

     I’m excited that this post inspired you to build your emergency fund! They’re hard work, but definitely worth it!