Frugal Fridays With Jen- The Value of An Emergency Fund

Most popular financial gurus, like Suze Orman and Dave Ramsey, recommend having an emergency fund, although they tend to disagree about how much you should have: 9 months worth or only a $1000. My husband and I tend to fall at the "almost 9 months" end of the spectrum. We automatically pay ourselves first with every paycheck- and I am so glad we do.

Case in point:

We were discharged home with our new daughter on Saturday. I had planned on taking 8 weeks off, as I have had a c-section. I can go back at 6 weeks if I want to, but there is no way I can go back sooner than 6 weeks. I started working for this new company only 5 months ago, and they knew I was pregnant when they hired me. Here in the US, I am not eligible for any required paid leave. I was told when I was hired that my short-term disability should cover me for 6-8 weeks at 66% of my normal salary. I learned this past Tuesday, after calling the short-term disability company, that my claim would be denied because my pregnancy is a "pre-existing condition", and I had not worked for the company for 12 months before I became pregnant. Having worked in insurance for years now, I am not surprised. That means I will not receive pay for more than 1.5 weeks, after which I will run out of sick time. We hadn't planned on this- but we can afford this, thanks to our emergency fund.

If we hadn't lived beneath our means beforehand and saved for a rainy day, we may have had to put the expenses I usually cover on a credit card at high interest, or even worse, paid our bills late. Our greatest annoyance, instead, is taking money out of our savings. I can continue to enjoy my time with my daughter without worrying about putting food on the table.

Need some tips on how to build an emergency fund? Try this article.