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Why Our “Emergency Fund” is More than $1,000

May 3, 2017 By Bailey

It’s no secret that being introduced to Dave Ramsey’s works is the catalyst for such a major financial change in my life. At the time I first read The Total Money Makeover, I was a 21 year old recent college graduate and was already in $23,000 worth of debt. I felt so hopeless and thought I would never be free of debt. Just 4 years later, I’ve paid off $17,000 on my own, plus my husband and I have paid off $5,500 of the $10,000 loan we used to fund our wedding. As of right now, we’re just $8,000-ish away from being 100% debt free!

If you’re not familiar with Dave Ramsey’s Baby Steps, his first guideline prior to beginning your debt snowball is to put $1,000 in savings for a mini-emergency fund. If you have a low-income, he recommends starting with $500. That’s it. No more and no less. However, my husband and I ignored this rule and opted to put significantly more into our emergency fund.

There were a few reasons that we opted to save more than Dave’s suggested amount.

Emergency Fund Dave Ramsey

We’ve had numerous expensive emergencies in the last year. In the first year of marriage alone, we’ve had to spend $2,000 to repair our vehicles for various issues, plus we had a major mattress catastrophe that we had to resolve.

Being a military family, we never know when our life situation will change. Although a military income is as stable as you can imagine, there are still so many unknowns with military life. Will my husband be sent on an unexpected business trip that we need to pay for ourselves (and then be reimbursed for afterwards)? Will the government shut down, leaving us without a paycheck until Congress can reach an agreement? Will we be forced to move cross-country and need to pay rental and utility deposits? In fact, that last scenario is 100% true for us as we will be moving this summer, a year sooner than expected.

We don’t have a way to make extra income. One thing that Dave suggests when you are in a money crunch is to make extra income by working overtime or taking on a second job. However, this is not a possibility for my husband; as a non-commissioned officer, he frequently works extra hours to get everything done and as with all military jobs, overtime pay is not a thing. With my struggles to find a job (it took me 6 months to land just a minimum wage job), we couldn’t count on me being able to work more, either. Although I am currently working, it would take me 2-3 months to come up with enough cash for a $1,000 emergency.

I need the security of a larger emergency fund.To be honest, I sleep better at night knowing that if we had a $1,000 emergency, we would still have some money left in our emergency fund until we could replenish it.

Although our long-term goal is to eventually have an entire year’s wages in our emergency fund (around $30,000), for now, we are comfortable keeping $2,500-$3,000 in our mini-emergency fund.

Similar post: Why & How We Live on Last Month’s Income

How much money do you keep in your emergency fund?

Filed Under: Finances Tagged With: Finances


Hi, y’all! I’m Bailey 🙂

I’m a Kentucky girl who fell in love with a soldier and packed up her life in the Bluegrass state to explore the world. I currently live in beautiful Bavaria, Germany with my handsome husband, Andy, our toddler son, Drew, and our cat, Gracie. Becoming Bailey is my happy space on the web where I share about our lives, Army adventures, and everything in between!

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