Why You Need a Starter Emergency Fund - and How to Get itWelcome to Step 3 in our journey to financial success in your marriage!  Today’s lesson is pretty basic and extremely important.

We are ready to start increasing our net worth directly while putting our budget into practice to extract every last penny that we can to apply to our first major goal.  It’s time to build a starter emergency fund.

In most cases, your starter emergency fund should consist of $1,000 in a local savings or checking account that you can access quickly if you need it.  If you make over $100,000 in your household annually or you feel particularly vulnerable financially (such as having a single income or uncertainty with your career), then I’d suggest bumping this up to $2,000.

The idea is to have just enough money on-hand so that you can draw a line in the sand and stop depending on debt to deal with your “emergencies” once and for all.

74 Simple Things You Can Do to Brighten Your Spouse's Day

Join our free newsletter to get this popular checklist... plus even more tips to make your marriage thrive:

If you aren’t willing to quit borrowing money, then I’d suggest you stop reading the Married Money Management series at this point because the rest of our plan for financial success simply won’t apply to those who want to live the rest of their lives in debt.

For those of you who are ready to kill your debts and live the rest of your lives free of that bondage, you’re gonna love this program! 🙂

Why $1,000 and Why Now?

When I first started following Dave Ramsey’s Baby Steps, I wondered why a starter emergency fund was placed before attacking high-interest debt, which is costing you tons of money each month to carry.  I also questioned the sense of only having $1,000 on-hand for the long journey (for us) toward debt freedom.

Well, the starter emergency fund is vital because it allows you to break your dependency on credit cards or lines of credit every time an unexpected expense comes up.  With $1,000 in the bank, you don’t have to panic when the starter goes out on your car or your child has to go to the doctor.  It’s enough to cover the “little emergencies” that will surely come up from time-to-time.

If you use any of your starter fund, you simply pause your debt snowball (which we’ll cover next week) and rebuild it back to the $1,000 or $2,000 level before moving forward.

So, why not be even more secure and save up $10,000 at this point?  For one, you don’t want to delay your debt pay-off too long and the beauty of this system is that we focus on one major goal at a time, and this allows us to get the starter emergency fund in place and then move on pretty quickly.

However, the biggest reason is that you don’t want to be too comfortable while you’re paying off your debts in the next step.  When you know there’s only $1,000 of cushion available, it increases your urgency in killing your debts and it ensures you don’t get too soft in your focus in meeting that major goal.

Easy Enough, Right?

It doesn’t get much more simple than saving up $1,000 in your local bank.  For some of you, this will take a few months and require sacrifice.  For others, you may have more than this already saved up.  Well, stay tuned because you’ll be asked to withdraw any “extra” savings next week so we can jump-start our efforts at getting you a debt-free marriage!

I can’t wait to share my favorite step with you:  Kill Your Debts (Damn It)!

Here’s a rundown of all the posts available to you in the Marriage Money Management series:

(photo source)


About the author 


Dustin Riechmann created Engaged Marriage to help other married couples live a life they love (especially) when they feel too busy to make it happen. He has many passions, including sharing ways to enjoy an awesome marriage in 15 minutes a day, but his heart belongs with his wife Bethany and their three young kids.

Leave a Reply

Your email address will not be published. Required fields are marked

  1. I’m sure there are many varying thoughts on this, but I’m wondering what your opinion is, Dustin. So, once the emergency fund is in place would you recommend continuing to put money in the fund as you start to pay off debt OR would you funnel that money all into debt payoff instead?

    1. Thanks, Angela. I share Dave Ramsey’s approach on this issue in that I think focusing on one goal (or baby step) at a time will yield the best momentum and results. I recommend completing step 3 with the starter emergency fund and then throwing all extra money at the debt (step 4). Next week, in step 5, we’ll talk about building a nice robust emergency fund once all of your non-mortgage debt is paid off. This is the way we did it, and we found a lot of power in focused intensity!

      1. Good to know. Yesterday it just kinda dawned on me that once the emergency fund is set, I wonder if that money would do us more good going towards debt instead. Helps to have someone back up the idea. Thanks!

  2. Pingback: Married Money Management Step 1: Make a Budget | Engaged Marriage
  3. Pingback: Married Money Management Step 4: Pay Off Your Debt (Damn It!) | Engaged Marriage
  4. Pingback: Married Money Management Step 6: Invest and Have Some Fun! | Engaged Marriage
  5. Pingback: Married Money Management Step 5: Prepare for a Real Financial Emergency
  6. Pingback: Married Money Management Step 7: Invest for College (But Only If You Want to)
{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}