After I graduated from college, I kept about $500 in my savings account. I thought that was pretty decent, considering I held a fairly low-paying communications job, lived in a big city, had health insurance, and didn’t necessarily anticipate a lot of big expenses. For a while that was fine. Until I needed to move out of an apartment unexpectedly due to a breakup. And then another apartment, because I couldn’t make rent. Then my car got towed three times in six months. I had no funds to help me handle those situations, so I relied on my parents, my grandparents, and my trusty credit card to pay for breaking a lease, moving costs, and towing recovery. I’m beyond grateful that I had such support from family members and access to credit—not everyone has backup options like that—but it was terrible. It also made me realize things were bound to happen outside of my direct control, and I ultimately wanted to feel empowered to handle them from a financial perspective without relying on other people or increasing the balance on my credit card.
That’s why an emergency fund matters to me: it’s a sense of security. For you, it may be a different reason: cash set aside for a true emergency (like a car accident), a fund that can support you in a particular situation (like if you lose your job), or simply money in the bank in case you need to make a major purchase (like buying a new refrigerator). When you know why you want to set some dollars aside, it becomes easier to take the steps to do it. So take some time today and write down a few reasons why having money set aside is important to you.