Baby Step 3: Fully Funded Emergency Fund

After paying off all of your debt using the debt snowball you want to build up and fully fund your emergency fund. A fully funded emergency fund is 3-6 months of expenses just sitting in the bank. A way to make this really easy is your budget, because with your budget you are keeping track of your expenses. Take how much you normally spend in a month and multiply that by 3-6, depending on what you are comfortable with.

you might be wondering why you need to have so much money saved up, I touched on it in Sundays post about building your starter emergency fund, but its for when Murphy comes knocking. having your fully funded emergency fund is super important right now because before now we would have never thought about something that would make countries shut down. For almost three months now we have been fighting the invisible enemy that is the corona virus. So we need to have 3-6 months saved up in case we lose our jobs unexpectedly, our water heater goes out, car needs a major repair or anything like that. emergencies are also those unexpected doctors bills or when you drop your phone in the toilet. You do not want to go back to debt! Avoid debt like the plague! Debt will not help you!

When we don’t have an emergency fund in place and something big comes up we go into crises mode. We will be stressed trying to figure out how to pay for the unexpected problem. symptoms of stress are rapid heart rate, fast and shallow breathing, tense muscles, and sweating. I don’t know about you, but those don’t exactly feel like fun things to experience. so build your emergency fund to avoid stress as much as possible!

You’ll be able to fund this really fast because once you’ve finished paying off all your debt, you can roll what you were paying in debt into your savings account. You want the emergency fund to be liquid so that you can access it easily.

Having an emergency fund in place will give you peace of mind, you will know that you are prepared and expecting the unexpected whenever it may come. You wont break a sweat, or lose sleep over anything. Living below your means, staying on a budget, avoiding debt like the plague, and having a fully funded emergency fund are detrimental to achieving your financial goals.


If you have any questions about budgeting, building an emergency fund, or paying off debt don’t hesitate to reach out to me!

You can create the life you want! I believe in you!



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