Hey readers! I’ve been on a huge binge of writing about personal finance lately because of a couple of things:

• What’s the point of getting into investing if you’re heavily in debt or not in tune with your finances? Do you know how detrimental investing can be to your personal life if you are not in the right financial position to invest and do not play your cards right? It can put you in a deeper hole than you already were!
• I am working on improving my own personal finance habits as well, so why not share my own experiences?
• I’m currently replenishing my emergency fund(s)
• I JUST LOVE PERSONAL FINANCE!

Anyway, I also do have real estate related content in the works and boy do I have some fun stuff coming from the landlord perspective of things…I sometimes forget that I wear a lot of different hats: Analyst, Landlord, Investor, Blogger (Can I call myself that now???)

Here comes another Avatar: The Last Air Bender reference!!! I’m almost like Dock/Xu/Bushi from Book 3 Episode 3: The Painted Lady. When team avatar came across the village of Jang Hui, a village in the middle of a river, they needed to get food and came across Dock, who offered to sail them to the village. When they got to the village and went to the market to get food, they were greeted by Xu, who is also Dock with a hat LOL…it makes more sense I guess when you watch the episode, so please, watch it!!

Anyway again…where was I, emergency funds!!! I won’t lie, I’ve done so much research in the past about how emergency funds are important because we don’t know what we don’t know and we don’t know when an emergency will happen. I want to touch upon this topic in itself because there is a sense of importance of being prepared for an emergency. I also want to touch upon how difficult it can be to build that emergency fund. We’re all given different ways to build these funds, but I really want you the reader to know that building an emergency fund is difficult and it takes time, so please don’t stress or rush to build it as quickly as you can and over stress yourself.

What Is An Emergency Fund And Why Is It Important?

An emergency fund is simply what the phrase states, a fund, typically in cash for an emergency. Emergency funds provide a sense of security for us individuals as we breeze through our daily lives. However, at any given moment, an emergency can happen. Having a set emergency fund is important because accidents, illness, layoffs and more can happen at any given moment and it’s you should to be prepared to eat unexpected costs. 3-6 months worth of your monthly spending is what is recommended for a solid emergency fund. Here is an example emergency fund:

• Monthly spending = $2,500/month
• Emergency Fund = 3-6 months of spending
• Emergency Fund = ($2,500 x 3) to ($2,500 x 6)
• Emergency Fund = $7,500 to $15,000

Sound fair enough? Now, I’ve stated before that we all have different levels of spending. Some may spend more on a given month, some may spend less. Some may have less debt than others. We are all unique with our own situations. We all can have similar situations, but we are all unique in our own ways. You may be comfortable with 2 months worth of emergency fund cash and that’s okay. This is a personal preference and you are in control of what you feel is comfortable for you. You do not have to follow the “expert” suggestion of having 3-6 months worth of spending saved up. I get it, it can be hard to hit that 3-6 month number. The importance is, have some type of funds ready in case something does happen. Be organized, be prepared.

Why Do You Think It’s Difficult To Build One?

To stay consistent, if we are using the monthly spending of $2,500/month as a base amount to build an emergency fund, that is a heck of a lot of money to be stashing away, especially if you are making under $60,000/year gross income. Aside from $7,500-$15,000 being a lot of money, here are a couple of reasons why I think it’s difficult to build an emergency fund:

• Temptation – I mean come on, if you have $7,500 sitting in your savings account and ain’t doing anything with it, isn’t it tempting to dip into the account and replenish it later? (That’s what I do LOL) How many times have you said to yourself, “you deserve it” and “treat yo self?” Now don’t get me wrong, we all deserve to treat ourselves, but it’s important to be mindful of how you spend on yourself.
• Discipline – A lack of it to be exact. I struggle at times to stay discipline when building my emergency fund. This is a make or break skill to building a solid emergency fund and also a key to being financially responsible. If you are discipline with your spending and savings, you will be just fine and be on your way to building that emergency fund. If you struggle at times or a lot, you may have a tougher time getting to that magic emergency fund number. Keep working towards building discipline, it takes time.
• Life – Look, life gets in the way, a lot. It may get in the way when you are trying to build your emergency fund. It’s important to stay composed and make sure you are able to recuperate and get back on track in case life does get in the way.
• Lack of Financial Boundaries – Have you ever dined with “friends” that do not properly allocate spending when eating out (meaning the bill is $200 for 5 people and your meal was $20, but they want you to split the bill evenly so you pay $40 for your $20 meal)? You’re not even at an all you can eat buffet too! Or how about spending money because you didn’t want to the “kill joy” or “party pooper” of the group? Societal pressures can get in the way of your savings and get put you in a deep hole. It’s important to set financial boundaries with people who may unknowingly cross your boundary and make you feel uncomfortable. Just because someone chooses to be financially irresponsible, doesn’t mean you have to be as well.
• Lack of Care – Let’s be honest, why even bother right? Have you or heard someone with that mentality? Sometimes people just don’t care enough to keep money stashed away and live day to day or paycheck to paycheck. Again, there’s no problem with that and you are entitled to your own opinions and your own methods of living life. However, if you are not like that, you don’t have to listen to those people either. You have the power to choose how you want to live and manage your finances. Don’t let anyone ever take control of your power of choice. I pray for those who have the privilege and don’t care as much about their finances go through life without major issues because you never want to see anyone go through horrible financial distress. A lot of people want that security and sometimes just don’t have the means because of their situation. It’s a huge privilege to be able to save money. If you do care about your finances or want to make a change for the better, you are on the right track of becoming financially responsible or may already be there.

How Can I Start Building One?

How can I put this lightly…TRACK YOUR EXPENSES!!! My 2^nd ever post gives you an introduction to tracking your finances. They’re important to track so you know where your money is going every month. Now, if you don’t want to track your expenses, that’s okay too! This is simply my opinion of how to get things done and my way may not resonate with you. Now if you want to get into tracking your spending, just know there isn’t one right way. We all track our expenses in our own ways. I use a mobile app called Spendee. I will be doing a review in the future of this app for I have been testing it out for 2020! However, there are many other ways to track expenses: You can even do the most basic form, a pen and paper (or a napkin if you don’t want to use paper!) Whatever you got to do to start tracking expenses because this will help you build that emergency fund quicker. If you don’t want to track expenses but still want an emergency fund, just get a look of how much money you make after taxes each month. Then work with that. As long as you have extra dollars at the end of each month, throw that into an emergency fund and not into a round of shots at the bar! Phew believe me, buying a round of shots ain’t cheap!

How Is Your Emergency Fund Looking Like Right Now?

I gotta be honest, I threw a big portion of my emergency fund into my Roth IRA ($1,500 catch up contribution for 2019 and the maximum $6,000 for 2020) so I can invest it in the market for the future and am in the process of replenishing my fund because I can take that risk and I am comfortable with it. The rest of my emergency fund went into helping pave for my new asphalt drive way and some into one of my brokerage accounts to trade options. Again, this is what I’m comfortable with. I can replenish my emergency fund because I know I have income coming in through my W-2 job and rental income. I also currently have a 2^nd emergency fund which is for real estate related expenses. The fund currently covers about 4 months worth of mortgage payments, without the rental income that comes in. So I actually carry two emergency funds; it’s just my personal one is depleted at the moment and my real estate emergency fund can use a boost too! We’ve had a lot of spending going on the past 3 months, so it’s definitely been tough to throw extra money into my funds.

The point of emergency funds is to give you a sense of security because life can just turn at any moment. If you have $1,000 stashed away for an emergency, then you’re well off than most of the country right now. It shouldn’t be like this, but it’s a privilege and blessing to be able to save money when a lot of people aren’t able to because of their situations and what life and society has thrown at them. Emergencies do happen, life happens. If you can and are able to, save those extra dollars and build an emergency fund. You’ll never know when you need it and when you do, you’ll really thank yourself for getting started. I hope this post finds you well and happy saving.