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Ask Dave

Rebuild The Wiggle Room

Bridgette is replacing an air conditioner tomorrow and has the cash to pay for it in the emergency fund. But how does she rebuild the emergency fund?

QUESTION: Bridgette in Knoxville is replacing an air conditioner tomorrow and has the cash to pay for it in the emergency fund. But how does she rebuild the emergency fund? Dave recommends stopping all savings until it’s replenished.

ANSWER: I would stop doing any savings and pour everything I’ve got into the emergency fund until it’s rebuilt. You’ve got some wiggle room in this budget. If you put $500 a month back, that’s 10 months. If you put $1,000 a month back, that’s five months. Somewhere in there is where you should be. It shouldn’t be any less than $500. Crank it up and make this a big deal to replenish the emergency fund because as you’ve found, it’s a weird thing to have an emergency and actually be able to pay for it. It takes some of the drama out of your life. It changes the level of stress when you’ve actually got some money. You’ve got some wiggle room in your life.

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Answer a few questions, and we'll create a plan tailored just for you. It only takes three minutes!
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