The Power of the Emergency Fund

2013 has turned out to be a very interesting medical year for me. Many of you know that I spent New Years Eve and Day at the hospital due to a gall bladder attack which led me to have my gall bladder removed. I spent two days in the hospital and received the bill last week for more than $18,000. Thank goodness for medical insurance coverage because my portion to pay was only $75.00. I was able to work that in to my budget and I paid it off almost immediately after receiving the bill.

Fast forward to this week and I received another medical bill for a procedure I had done about a week and a half ago for $190.00. I really wasn't expecting a bill so high for an outpatient procedure, nevertheless I wasn't worried about having to come up with the money to pay for it. I could rely on my EMERGENCY FUND that I had built up last year. 

To add to that, both Kū and I will be having some dental work done next month and although I know I have good dental coverage, I know that there will be costs involved. Again, I am able to rely on my EMERGENCY FUND to be able to stay current on my medical and dental financial obligations. 

Because I live on a budget system where every dollar is accounted and earmarked for specific bills and expenses, it is great to have piece of mind that I have funds to use should any type of emergency come up. 

My question to everyone out there is how much do you have in your EMERGENCY FUND? Or do you even have an EMERGENCY FUND? Please take the time to complete the poll to right side of this post and answer the question regarding an EMERGENCY FUND. You will later be able to see how you compare to others.  My guess is that most people donʻt have not yet established a fully funded EMERGENCY FUND. 

Dave Ramsey compares an EMERGENCY FUND to an old-fashioned Grandmaʻs rainy-day fund. He also suggests to start your EMERGENCY FUND with $1,000. Although this wonʻt catch all the big things, such as a job loss, it will help with little things like my medical or dental bills or if I need to fix my car. 

COMING SOON: In my next blog, I will discuss how to establish and fully fund an EMERGENCY FUND and also what types of situations constitute an EMERGENCY.