After an unexpected dog surgery, car repair and plumbing leak, our emergency fund was completely drained. Now, we are slowly but surely rebuilding our emergency savings. However, it's hard to replace $4000. Additional unplanned expenses have prevented us from saving enough money to bail us out in a future crisis. After reading a Business Insider article, I realized that I am not the only one who is having a hard time building an emergency savings account. In fact, the article reported that only "twenty percent of Americans said they have more than $100 saved up for the unexpected."
After the initial string of setbacks that drained our emergency account, we had to replace some dry wall in one of our bedrooms. We also had to have some dry wall redone from our plumbing leak. This ended up costing us almost $300. Then, my husband needed a new car battery that cost $100. While we can pay for these extras, it prevents us from saving money.
Since my daughter is on summer break, we no longer are paying for her school tuition. Since she will be going to public school next year, we will now have some extra money to put into savings. We have also been using fans and setting our thermostat higher to reduce our electricity bill.
Rethinking our Budget
My husband and I redid our budget. We added up all of our bills along with food and gas expenses. Likewise, we are keeping track of how much money we spend at the store. We are taking out $100 in cash when we go to the grocery store. This prevents us from making impulse purchases and staying in our grocery budget. If we stick to our budget, we know we have a few hundred dollars left over. We are using some of this for fun money. However, most of it will be put into savings. Each time we go the store or go somewhere like the zoo, we subtract it from our budget. This way we know exactly how much money we have left for the month.
How Much Should We Have
According to a New York Times article, it is recommended to have "six months" of expenses saved up. Interestingly enough, only a quarter of Americans meet this recommendation. Inactivity fees, excessive withdrawal fees and low interest rates on savings accounts are some of the factors that make it even harder to save. Currently, we have an automatic transfer that moves money from my checking to savings account each month. We will also take the extra cash from our grocery shopping and put it into savings too. Before we know it, we will, once again, be well prepared for any future emergencies.
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- Personal Budgeting