$1,000 Isn't Enough

Kimberley thinks it will take about a year and a half for her to get out of debt. Is $1,000 really enough to cover her for that long?

QUESTION: Kimberley in Dallas thinks it will take about a year and a half for her to get out of debt. Is $1,000 really enough to cover her for that long? Dave knows it's not enough but explains why he sets the baby emergency fund amount at $1,000.

ANSWER: You’ve made it nine years without any money. Now you’re worried about two? Let me tell you what ends up happening. Having counseled thousands of people through the classes, on the air, and personally one-on-one for 20 years, the $1,000 is not enough. I know that going in. But it is usually more than you had. It makes you start thinking about how to handle emergencies and other ways to fix it instead of putting it on easy payments. Your change in how money is viewed and your change in how you handle situations where debt is no longer an option changes your needs to the point that $1,000 will make it more times than you thought, but you will be tested on this subject during this year and a half. There’ll be a moment that God says, “This is a test.” The brakes will go out on the car, and you’ll have to find someone to fix it within the guidelines of the amount of money you have instead of putting it on a credit card. You put a little more effort into saving money and making it fit within the cash that you have. It changes your whole picture. It’s more than just the $1,000 thing. If you kept living your life like you used to, $1,000 wouldn’t be enough. But I think in most cases, you’re going to find it’s enough to get you through this. The number of huge emergencies that you’ll have during the 18 months is not that many while you’re getting this debt knocked out.

I’m going to stick with the Baby Steps. They work.

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