Big Shovel, Low Emergency Fund

Jeanie and her husband are on Baby Step 7, but this summer, their emergency fund was wiped out. Should she stop retirement and try to refill the emergency fund?

QUESTION: Jeanie in Atlanta and her husband are on Baby Step 7, but this summer, their emergency fund was wiped out. Jeanie will have enough to refill the emergency fund in June. Should she cross her fingers and do that or stop retirement and try to refill the emergency fund? Dave thinks she can do both.

ANSWER: You make $90,000. You’re used to living on a budget. You don’t have any debt. It’s okay if you want to stop the retirement temporarily. I’m a little worried about a household income of $90,000 sitting there with only $1,000 in the bank and no emergency fund. If you can’t see your way to rebuild that emergency fund out of cash flow without stopping retirement, then I would temporarily stop retirement.