In the last 4 months, I’ve used half of my emergency fund.

A few years ago, I was living in a cold basement and unknowingly very close to the end of a contract job as a designer. Things were getting tight and I reached out to a friend who had told me that if I ever needed a job, he could get me one as a valet.

I had a new job starting in a week. Scared of what I was getting into, I asked another friend for his quick advice before starting.

He said two things:

  1. Learn about the area you’ll be working because everyone wants your advice on where to go next.
  2. Be comfortable driving without a seatbelt.

Moving hundreds of cars a day, just one block or so, I quickly grew accustomed to not wearing my seatbelt. I looked both ways then drove across the street and parked. Not wearing a seatbelt became second nature, I simply didn’t need it.

The seatbelt is a perfect analogy for an emergency fund. Today, driving at all without a seatbelt makes me feel a little uneasy. At minimum it holds me snug as I take a sharp curve, at best it saves my life in the event of a crash. My emergency fund allows me to stay stable even during the holidays when I’m spending twice as much as the seasons before. I may not need it, but I know it's there.

So, what about when you do need it? It’s always amazing to see a gnarled car that someone has walked away from, almost untouched, because they were wearing a seatbelt. When it comes to finances, you won’t necessarily see the major accident that happened and how they dealt with its lasting effects. The victim may be living life and spending as usual, but trust me, they essentially just crawled out of their wrecked car, covered in glass, and they are bleeding out.


“The victim may be living life and spending as usual, but trust me, they essentially just crawled out of the wreckage, covered in glass, and they are bleeding out."


Just this week, I met with someone who wanted help getting started with a budget. She didn’t have any emergency fund to speak of and what I saw in her bank statement had me worried. It was a payday loan. You’d never know her financial status from her appearance. From the outside you'd see a woman who is at the top tier in her company, holding a pivotal role– directly reporting to and wrangling her CEO. In a weird financial sixth sense sort of way, if she turned around in her high heels during the most recent ribbon-cutting ceremony, you’d see her open wounds from the financial mistakes in her life. An even partially established emergency fund could have protected her from the damaging payday loan.

The reason for this post wasn’t about her, though, it was about me.


In the last 4 months, I’ve used half  of my emergency fund.


It’s true. In the last 4 months, I’ve used half (3 months) of my emergency fund. Or you could read that as: If I didn’t have an emergency fund, I’d have $5,905 in credit card debt growing interest at ~15%.

Should I define an emergency fund? Sure. Most would define it as 3 to 6 months of living expenses. You want this money to be in a liquid form like cash, or any way that is accessible very quickly. That may be $5,000 or $60,000 depending on the person.

The emergency fund has been one of the most important things I’ve ever worked for. If you’re in a position where you don’t have an emergency fund and wonder why I said I “worked” for mine, consider that I’m a person who knows where every dollar I spend goes. And at my savings rate, it takes me about 4 months to save one month’s worth of expenses.


"at my savings rate, it takes me about 4 months to save one month’s worth of expenses."


In late October, my car broke down for good. Within 3 days I had test driven a few cars, arranged to buy a car, put down $4,000 and was back on the road. It hurt a bit to write that check, but I was able to do it.

February 1, I finally went to the dentist after years of putting it off because 1. I’m stupid, 2. I didn’t have insurance for a bit, and 3. I’m stupid. $1,905 later my teeth are back on track as well.


Market Watch recently published an article exposing that most Americans have less than $1,000 in savings. I think it is fair to say that, financially, most Americans are driving through life without a seatbelt on, and don’t realize the danger they’re in. Typically, Americans usually address unexpected expenses by relying on credit, friends and family, or even their retirement. (Any of these are better than a payday loan!)

In my scenario, I’ve already had two expensive financial accidents in just a few months. For my sake, I hope I’ll get a reprieve for awhile. But I don’t have much control over that. The unknown is why I wear a seatbelt.

I may have felt safe when I was valeting cars because I only drove a few yards at a time. At scale, if I drove enough I’d get hit by something big, and it would hurt.

I think I’ll keep my seatbelt on, and you should think about buckling up.

Noah WarrenComment