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How An Emergency Fund Can Help You Get Out of Debt

Guest post from Jamie 0f Medium Sized Family

You’re walking along just like any other day, when you notice mud caked between your bare toes. That seems odd — then you glance around and notice how dark it is. Your eyes catch the sight of a dirt wall. You eyeball the wall all the way up, and that’s when you discover the sun is even further away than usual.

You’re in the bottom of a pit.

You shrug your shoulders, grab a shovel, and start digging.

To the outside observer, that seems absurd. How can you hope to escape a deep hole by digging it even deeper?

Real people do this every single day.

They discover how deep they are in debt, but figure they can’t do much about it. So they just continue digging deeper as if it makes no difference.

If this sounds like you, it’s time to make a change!

You can get mad, do a complete turn-around, and start attacking your debt (if you’ve got the fortitude to make that kind of total change, you rock!) But I’ve got bad news for you; attacking your debt is kind of like trying to climb the dirt walls of the pit with your bare hands. It’s going to be really hard to succeed.

What you really need is a safety harness and maybe some rocks to grip. But how do you get those supplies from the bottom of a pit?

You ask for help from people who’ve already been there!

The Safety Harness = The Emergency Fund

I know you might be excited to dig into your debt, but before you start paying off your debt, the first thing you should do is build up your emergency fund.

I should mention that if the amount of debt you owe is small (less than $1,000) and you make a decent income, you might do just fine attacking debt before building your emergency fund… but, in my experience, most people owe much more than $1000, and are barely making enough to get by.

If that sounds more like your situation, you first need to wrap yourself a safety harness (a.k.a. an emergency fund).

Before you tell me you don’t have time or money to build an emergency fund, let me tell you why it’s important. An emergency WILL happen — probably sooner than later. For our family, it was a major van breakdown just two months into our debt repayment.

Then what? If you have credit card debt, I bet your habit is to whip out the card to cover your emergency… right? If you do this, you not only wipe out all the progress you made paying off the card, but you also reinforced the habit of grabbing the credit card when the going gets tough.

You might not realize it yet, but you need to learn what it feels like to turn to your bank account when you need to cover an emergency. And while you will have to send any extra debt payments to your bank instead (gotta rebuild the emergency fund), saving money rather than repaying debt (again) is a whole different feeling.

Where to Get the Money

I realize that if you’re already deep in debt and struggling with money, an emergency fund might sound like an impossible task! But look around. When you’re in the bottom of a pit, you have to do just a little bit of the impossible to get out.


Don’t expect to find money for an emergency fund by doing the same old thing. Make a big change — cut your spending dramatically for a month, sell things to gather the money, or take on an extra part time job.

None of these things should last forever. If you struggle hard for a month or two, you should be able to come up with a few hundred dollars to start your emergency fund.

Doing this has been tough on our family, but we like to think that our kids will remember this struggle when they are older. Hopefully it will put a bad taste for debt in their mouths.

Rock Grips

Now, what about those rock grips I mentioned? Clawing at the dirt while you try to reach the top is a scrappy way to get out of debt. But an easier way to do it is to learn from people who already got out of debt. Climb the same rocky path they used, and you’ll get there faster.

My Hubby and I are Dave Ramsey fans (although we don’t follow his advice exactly). We like his baby steps approach to getting out of debt and turning your financial life around.

Crystal has a free ebook: 5 Days to a Better Grocery Budget that might be the perfect way to learn how to change your spending habits from someone who obviously knows how to pinch a penny.

Search out other blogs about getting out of debt and follow them for more help and encouragement.

Remember, making a change might seem intimidating, but it will be worth it in the end! Pull together an emergency fund and start paying down your debt now.

And whatever step you choose to take next… please put down the shovel!

Do you have an emergency fund?

Jamie dreams of donuts appearing at the desk where she writes her blog, Medium Sized Family. You’ll often find her juggling her 5 kids’ activities while chugging coffee. Check out her Secure Your Savings and Find Peace in the New Year series with 30 ideas for building your emergency fund.

photo source

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  • These are some great tips. Unexpected er’s happen all the time. No warning they just happen. We woke up a month ago and had a small flood in our little basement that holds the sump pump. I’m so glad we didn’t have to think about where the money was going to come from!

    I like your thoughts on not depending on your credit card for er. That can really build up.

  • Jessica says:

    We recently had two plumbing emergencies (tree roots in the sewer caused a backup and a pipe was leaking in an interior wall). The plumber only accepted credit cards. They told us that they got shafted too many times with checks and it’s not safe for their crew to carry any cash. So don’t cut up your credit cards necessarily. But have the money to pay off the bill when it comes. That’s what we do. We pay our balance in full.

    • Mrs S says:

      We ran into that recently. We needed a specialty tow truck in an emergency and ONLY accepted credit cards. So despite carrying sufficient cash and a debit card… we had to have a friend with a credit card pay it (we gave them the cash, of course). I’m not a fan of credit cards, but we do now have one for emergencies, in addition to our emergency fund.

    • Ruth says:

      It seems to me that as long as a debit card has a Visa or MasterCard logo on it, it should be accepted anywhere that credit cards are accepted.

      Surely there has to be loopholes for rules like that anyway even if they literally didn’t take debit cards. One could go get them a money order or drive the cash payment over to their corporate office. Not everyone in the population has credit cards or can even get credit cards.

      • Jessica says:

        That was their policy. I’m sure with due diligence somebody could find a plumber that would accept other payment options, but of the four that I called, they all only accepted credit card payments and payments had to be made at the time of service, (like a Saturday night and President’s Day holiday, so office not open and no bank open for a money order even if they took it).

    • Jessica says:

      I bet he would take cash! That’s exactly what an emergency fund is for.

      • Jessica says:

        Not one of the four plumbing companies we called accepted cash payments. They each said it was too dangerous for their plumbers.

        • Ruth says:

          A debit card poses no more risk to a plumbing company than a credit card. Just like a credit card, payment would go through immediately and would be declined if insufficient funds were available.

          I pay my propane bill with a debit card and they process it in the same way that they would make a credit card payment.

          Amazon Prime says that they only take credit cards for subscribe and save, but I’ve never had any problem with using my debit card.

  • denise says:

    Every year my husband and I budget out what we will need for car insurance/registration, house insurance/taxes, car maintenance/repairs, home maintenance/repairs, trips to visit family, garden expenses, life insurance, clothes/shoes, work tools (he is a mechanic), and some other expenses. Then I take that total amount and divide by 52 and we put that amount into a savings account each week. No matter what. And it has worked really well for us to be prepared for those things. Obviously other things still come up but we can always adjust categories and make it work and have been able to pay debt off AND save for expenses at the same time!

    • We call that a sinking fund in my house, and we learned how important that is, too! Even better than the fact that you don’t have to put things like that on credit, it also teaches you to stop reaching for the credit card all the time.

      • Denise says:

        I call it “annual expenses” since some of them only come up once a year. I do have some of them set to auto pay with a credit card to protect my bank account from fraud online but I always have the $$ to pay it off immediately.

        I do think it is good to have a credit card for emergency, travel, and online purchases but we are working to pay ours off so we limit when and how we use them. But I work at a bank so I know the fraud danger out there and refuse to use my debit card online.

  • Kelly says:

    I have a question- we too are Dave Ramsey fans and just went through FPU this past year. Our problem is – we can’t seem to get past baby step 1! Thankfully every time we have had an emergency the money is there, but it ales forever to build it back up again. Besides the normal sell stuff (we don’t have “stuff” anymore ) , how do we get to paying down debt??

    • Sandy says:

      I completed Dave Ramsey’s 7 Baby Steps. I am fortunate that I have a job in which overtime is usually available. I worked 110 in each of 2 consecutive 2-week pay periods to complete the first baby step of $1,000 in an emergency fund. I continue to work overtime to this day. I have all debt paid off, including my home and car, an 8-month emergency fund, and I’m saving towards a new home. I would say work overtime or find a second income and keep trying. You’ll get there!

    • Kelly, I’d recommend doing a burst of hard work to come up with the emergency fund quickly so you can move on to paying down debt. I’ve got several ideas here that might help you: I tried to come up with ways to save and earn extra money that Moms can do with bits of time, so hopefully you’ll find something that’s a good match. Good luck, you can do it!

      • Laura says:

        I am thankful to have extra income lately to pay down some significant debts. Because of this second job, we have finally made a lot of progress. The thing that most people neglect to tell you is how extremely tiring it is to have a second job. Ugh. I’m not sure how long we will be able to keep it up. We take most of the Sabbath day off, but the only other time to work extra is evenings and weekends, so it is tough. I know it is the right thing for us to do right now to get out of our hole, but man, just know it takes a toll.

  • Aimee Hadden says:

    Good tips!! We are currently working hard to pay off some debt we have accumulated over the past few months. I’ve found one thing that is helpful is to set small goals for the month. Instead of just focusing on how much I want to pay off in the long run I focus on how much we can pay off this pay period.

  • Any savings fund can start with baby steps… and that’s the key: do it in steps. This is the concept of old-fashioned bank “Christmas Clubs” and store-offered “layaways” for purchases. Putting in a little at a time on a regular basis can be a painless way to get that emergency fund up to speed. Even just $5 per week will be $260 at the end of a year, and that can be enough to cover a small emergency (like replacing a bad car tire). More savings may always be better, but some savings is still pretty good – and you might be surprised to see how good you feel when you have some put together.

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