Part #3 of What To Do with Extra Cash: Emergency Hotline

Just before our first son was born we had a little bit of a family fiasco.  Our washing machine, refridgerator and stove all had to be replaced within three days of each other! It was crazy.  But, we have never been happier to have our emergency fund.  Well, maybe it was when the pipe busted in our cellar and water was spraying everywhere and a plumber had to come replace the pipe. I take that back... we might have been a bit more relieved when our car broke down during our "day trip" with our 14 month old.  A trip that was supposed to be just a quick trip for a day at the zoo and under $150 (including food & gas) turned into a three-day, two-night stay with rental car, hotel costs, a tow truck & a mechanic.  We definitely busted the budget! I will never again go on a "day trip" without an overnight bag - especially not with young kids!

Challenges and tough times come.  No one is excluded from that.  A God-focused outlook and prayerful attitude will see you through.  One thing that my hubby and I try to do is prepare for those tough times: spiritually and financially.  That's why we always put some extra money into our emergency fund.  Credit cards are great for quick access to funds, without atm fees, but interest rates... ugh.  I don't have anything nice to say about that. 

 A great rule of thumb for an emergency fund is $1000.  It sounds like alot to set aside in one sum, but it's a great number and covers the majority of emergencies we've faced.  Just remember: it's for emergencies ONLY!  For the unexpected.  We've dipped into the fund in the past for "non-emergencies" and it's usually not the best idea.  We always work hard to get the money quickly replaced, but it can to easily become a bad habit of dipping into the account. We actually have it set in it's own account at the bank.  It's not in an envelope at home (too easy to access) and it's not in our normal savings either (that pays a couple bills each month via autopay).  In short, set aside $1000 and keep it separate!  If you use a credit card to pay upfront, go home and pay the bill with emergency funds.   That's what we've done in the past and it's worked pretty well! 

So make a plan to set aside some emergcy funds - every little bit counts. 

Stayed tuned for Part #4 of what to do with extra cash: Stocking Stuffers!