What's in a name?
This reminds me of Romeo and Juliet (I was an English major, after all). And I'm having a bit of a tough time with what to call my emergency fund. I need to call it something other than emergency fund, because that's not what it is. I haven't had anything remotely that I would call an emergency, but I keep spending out of it. I mean, after all, on Friday, I drained it to pay for the brakes on my car.
So, I've said this before, I'm adopting the Dave Ramsey model of personal finance and his baby steps.
Step 1: put $1000 in an emergency fund.
Step 2: snowball your debt. Pay the minimum amount on each account, then anything extra, pay down your smallest debt. Once that is paid off, add the minimum payment for that debt into the minimum payment of the next smallest debt. And so on and so forth. I've already paid off one account. I'm on my way to paying off a 2nd account. I'm accounting for every dollar, not keeping anything in my main checking account other than a couple bucks. I have a separate account for groceries that I contribute to every paycheck.
Here's my issue: Step 1. Put and keep $1000 in an emergency fund. Because it isn't an emergency fund if I keep spending out of it. It is more of a cushion fund. Yes, I keep replenishing it. After I pay all bills, I put whatever is left into the emergency fund. If I hit $1000, then the remainder of that money goes to the lowest debt to pay it down. Which never happens because I am constantly paying out of that emergency fund. Gas (because I always spend every penny out of my grocery account on groceries and dining out), dance fees that come up, school fees, household repair items, etc. It is more of a cushion fund that I am constantly replenishing.
I want to change the name of it to reflect what it actually is. I try my best not to spend the money, but life happens. I feel bad when I spend that money because with my credit cards maxed out, I don't have an emergency fund per se. Once I get the cards paid off, those will be used for emergencies only, but I will always have this "extra" fund. So, what to call it.
I think cushion is the best name for it. After all, once my son moves to his dad's, I will no longer have unexpected financial needs pertaining to school or dance. I will be able to better control my finances and see what I need to spend my money on and account for every dollar better.
I think I will still track my cushion fund on here because it will be interesting to see if I am able to maintain it. I will still be adding $25 to my cushion fund every paycheck. I'd like to see it grow and stay above $1000, if possible. But we'll see.
This reminds me of Romeo and Juliet (I was an English major, after all). And I'm having a bit of a tough time with what to call my emergency fund. I need to call it something other than emergency fund, because that's not what it is. I haven't had anything remotely that I would call an emergency, but I keep spending out of it. I mean, after all, on Friday, I drained it to pay for the brakes on my car.
So, I've said this before, I'm adopting the Dave Ramsey model of personal finance and his baby steps.
Step 1: put $1000 in an emergency fund.
Step 2: snowball your debt. Pay the minimum amount on each account, then anything extra, pay down your smallest debt. Once that is paid off, add the minimum payment for that debt into the minimum payment of the next smallest debt. And so on and so forth. I've already paid off one account. I'm on my way to paying off a 2nd account. I'm accounting for every dollar, not keeping anything in my main checking account other than a couple bucks. I have a separate account for groceries that I contribute to every paycheck.
Here's my issue: Step 1. Put and keep $1000 in an emergency fund. Because it isn't an emergency fund if I keep spending out of it. It is more of a cushion fund. Yes, I keep replenishing it. After I pay all bills, I put whatever is left into the emergency fund. If I hit $1000, then the remainder of that money goes to the lowest debt to pay it down. Which never happens because I am constantly paying out of that emergency fund. Gas (because I always spend every penny out of my grocery account on groceries and dining out), dance fees that come up, school fees, household repair items, etc. It is more of a cushion fund that I am constantly replenishing.
I want to change the name of it to reflect what it actually is. I try my best not to spend the money, but life happens. I feel bad when I spend that money because with my credit cards maxed out, I don't have an emergency fund per se. Once I get the cards paid off, those will be used for emergencies only, but I will always have this "extra" fund. So, what to call it.
I think cushion is the best name for it. After all, once my son moves to his dad's, I will no longer have unexpected financial needs pertaining to school or dance. I will be able to better control my finances and see what I need to spend my money on and account for every dollar better.
I think I will still track my cushion fund on here because it will be interesting to see if I am able to maintain it. I will still be adding $25 to my cushion fund every paycheck. I'd like to see it grow and stay above $1000, if possible. But we'll see.
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