Why I Don’t Have an Emergency Fund

The more involved I become in the world of personal finance, the more I hear about the importance of creating an emergency fund.  In my mind I know that this would be a wise thing to have.  As a matter of fact, before I started very seriously down the road to FI, I read Dave Ramsey’s book and everyone else who knows about his philosophy knows that he recommends an emergency fund of $1,000 even before starting the debt snowball.  I adhered to this initially, but then one there just wondered why I’m sitting on a thousand dollars when I still have so much debt.  So I threw that money at my debt and never looked back.

Here are some reasons that I don’t have an emergency fund:

  1. My job is fairly steady. – I work as a teacher.  I also work in a discipline that isn’t always the easiest to find teachers for.  That being said, I’m fairly confident that even if I lost my job of over a decade, I could likely find something relatively easy.
  2. I feel better about eliminating debt than hanging on to 1k. – I make enough money that coming up with a thousand dollars isn’t such a hardship.  I feel like a thousand dollars isn’t really enough to get me out of a major emergency.
  3. I could use a credit card if I really had to. – This is not something I’m advocating, and I’m sure most people would feel the same, but I think an emergency is a great use for a credit card.  While I don’t want to use my cards for frivolous purchases, I feel like an emergency is one of the main purposes of even having a credit card to being with.
  4. I get my entire salary over a ten month period. – Due to the fact that I don’t work for two months in the summer, I have to save the money for my summer expenses myself.  I take a small amount of each check and put it aside for living during the months of July and August.  So while I technically have some money saved at all times, it’s savings for July and August.  However, if a devastating emergency cropped up or I got laid off, I could tap into that money.

While I don’t currently have an emergency fund, this is something that I plan on working on down the road.  I’m not sure if I will actually call it an emergency fund or if I will simply save very aggressively as the years go by.  My method may not work for everyone due to the fact that your employer might pay you differently, or maybe you just feel uncomfortable not having a savings cushion to fall back on. These are things I can definitely understand, but I would take a good hard look at my situation and analyze whether or not paying more interest on large amounts of debt is worth holding on to money.

How about you, do you have an emergency fund?


  • I’m exactly the opposite. I have $14k in an emergency fund right now and am still not completely comfortable. I’m very concerned about losing my job and needing to be able to cover our expenses for several months. To each her own!!

    • True! I think if I didn’t work in education I may feel differently. It probably also depends on how much you actually need month to month. Finding a high income job may not be that easy, whereas if you only need a couple of thousand it may not be so bad.

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