My Journey to Baby Step #1 ($1,000 Emergency Fund)

I’m not here to tell you ridiculous things, like quickly, sell a kidney to fund your emergency fund. I’m not here to be over the top extreme. I am just a regular person, living in Southern California (yeah, it’s really expensive to live here) and I only take home about $1,100 every two weeks. My boyfriend also takes home about $1,100 every two weeks. I’m not here to tell you to do something that can’t be realistically done. I am here to tell you how I funded my “baby” emergency fund of $1,000 and give some additional ideas to hustle extra money to get that emergency fund (EF) funded and out of the way.

It should also be noted that I had my emergency fund fully funded a little under a month into my journey (December 2016), when BAM! Murphy hit, hard. $6,300 hard. Who or what is Murphy you ask? “Murphy’s Law” says “Anything that can go wrong, will go wrong.” Anyone who has been around long enough will know this to be true. So a month into my debt free journey, some pipes burst under my house, costing me $6,300 (had to replace everything underneath as well as subfloor in two bathrooms that was water damaged. Had the plumbers install two new toilets and a new kitchen sink while they were at it). This took my entire EF and then some. I had to borrow $4,800 from a family member. Add it to my list of debts to pay back. Back to square one I went.

I felt really defeated for at least a week. I felt like quitting my debt free journey. I was back at square one with no savings, even more debt than when I started, and no light at the end of this $100,000+ debt tunnel. I went ahead and sulked in my sorrows for about a week. Then I got up off my derrière and hustled to get that $1,000 for the emergency fund.

The first thing I did was cut things out of my budget. $5 Starbucks every day at lunch? Nope. $60+ manicure/pedicure trips? Cut out of the budget. $5 breakfast burritos from the cafeteria at work everyday? No more. Those were pretty much the only areas I was able to cut back on because I already don’t have cable television or home phone service (things people usually cut out of the budget in the beginning). Cutting out my $5 a day coffee habit saved me at least $100 within a month. Cutting out the mani/pedi saved me about $60 in that month (and I haven’t had a mani/pedi since either). Cutting out the burritos saved me about $100 a month. Ok, so now we’re at $260 saved. That means we still need another $740 to fully fund the EF.

A great way to check and see if there is anything you can cut out from your budget is to log in to your online banking and take a look at your last two to three pay checks and everything in between. Add up all of the debits between pay checks and organize them into categories (for us, it was eating out, Target/Walmart, bills, other – such as DMV or other random expenses). When I was first starting out in this journey, I did this and I found that in just two weeks time, from one pay check until the next, the boyfriend and I had spent $704 on eating out and groceries. Yes, you read that correct. Two adults spent $704 eating out and buying groceries. I knew our habits had to change after this.

The next thing people usually do to get extra money is to sell their old crap they have lying around. It just so happened that I had my old iPhone 6s Plus. I had gotten the iPhone 7 Plus on device payments and had never gotten around to selling my 6S Plus (that I had bought in cash the year before). I went on Craigslist and posted my Rose Gold 6S Plus for sale. I sold the phone that weekend for $450. I was feeling pretty good now with $710 saved, when BAM! Murphy strikes again! Our lawn mower broke. It just wouldn’t start and couldn’t be repaired. I had to buy a new lawn mower to the tune of $325. EF now back down to $385. (This journey can be so frustrating sometimes.

At this point I put a plan into action to save $50 out of each pay check until the EF was fully funded (which put my completed EF date around September 2017). Luckily the end of January came and our W-2’s got sent out at work. Tax return time. While a lot of people get excited about tax returns because they get a lot back, I don’t usually get a large return (if any, sometimes I owe), but this year I got lucky for once! I filed my tax return early and I actually got a refund of $268. I took $68 of it and paid off my Kay Jewelers card and threw $200 at the emergency fund. $585 in the EF, don’t mind if I do.

School then started in February 2017 and I finally had a meeting with a counselor at the college who informed me that one of the classes I had signed up for was unnecessary for my degree completion because I already had the credits for that requirement satisfied. I was able to return the text book I had purchased for that class and got back $130, which I sent straight to the EF. By this time I had also saved $100 from my paychecks (remember I was saving $50 per check towards for EF).

It was at this point that I finally got a buyer for my Mustang that I had been trying for so long to sell. I had the car for about 3.5 years and had paid a good portion of it off. I debated keeping it since it was my beloved race car and had a low payment of $289. The thing was that I had been in a car accident in August 2016 in which my Honda (daily driver) was totaled and my neck was pretty screwed up (bulging disc and tons of pain/numbness requiring months of physical therapy and medications). I also injured my knee in the accident. I then got in a second accident at the end of January 2017 in which I was rear ended and my neck got injured all over again. Ultimately being injured in the car accidents led me to have quite the great aversion to driving, so I decided to sell my beloved race car. I pocketed $8,900 from selling the Mustang.

I know that not everyone has a car lying around to just sell and profit $8,900 off of, but this is my story and I made the sacrifice that I made for myself and for my journey. Maybe you don’t have a car to sell, but maybe you have something else like a piece of jewelry or a boat you don’t use much or a computer or something worth some type of value that can be sold, and if you don’t have something to sell to bring a large chunk of money your way, there is nothing wrong with continuing to save that $50 per pay check until the EF is fully funded (especially if you try to pick up over time so you can save even more than the $50 each check). Selling my car allowed me to fund the EF quicker, but if I didn’t have a car to sell, the EF still would have been funded, it just may have taken me a little longer. I had $815 in the emergency fund before I sold the car. I pulled the other $185 from the car proceeds and fully funded the EF with that money. Selling the car allowed me to save two months of saving for the emergency fund.