Getting $500

I mentioned in my last post that I’m going to go at the Baby Step #1 with full force. To this end I want to get my $500 Emergency Fund set up by the end of February. Here’s how I’m planning on doing it:

Current E-fund balance: $140

Fetus Step #1: Continue to transfer $50 per paycheck in to E-fund via direct deposit.

I have 3 paychecks between now and March 1st. This will net me a total of $150 in my E-fund to being my balance to: $290.

Fetus Step #2: Reduce payment on credit card to minimum for one month.

Right now I’m only paying $100 over my minimum, so this will get me to $390 in one month.

Fetus Step #3: I’m reducing the amount of money I give myself for toiletries and food every two weeks by $30.

I’ll do this for 3 pay periods, giving me an extra $90 dollars. After this fetus step my Emergency Fund will be at $480

Fetus Step #4: Reduce payment on mattress to minimum for one month.

I have a 0% interest loan on my mattress I needed/wanted to buy when my sister moved in with me. I have my automatic payments set to pay this off in 11 months and my 0% interest ends after 12 months. Skipping one month won’t put me behind schedule, and I have a feeling I’ll target this bill and then snowball the payment once I get my E-fund in order if Dave Ramsey has his way. 😉

My minimum on this is $40/month, so I’ll reduce my payment from $105/month to $40/month and put the remainder ($65) into my E-fund.

Which means after one month the value will be $545. HUZZAH! A little E-fund pot that is full of money. Yes, it is over $500 – I’m totally okay with that. I’m leaving a buffer in case the $30 decrease every two weeks is too much for me. 😉

I’ll be rearranging my automatic payments to arrange to do this immediately. It will be awesome to have a nice full E-fund in a MONTH rather than just slowly building it over time like I have before. Then I can concentrate my efforts on my debts.

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13 Responses to Getting $500

  1. 2blu2btru says:

    Sounds like a good plan to me1 😀

  2. Good Luck! If you like no spend challenges, Sharon is doing one for next month that I’ll be participating in. http://midlifemommusings.blogspot.com/2011/01/january-challenge-gearing-up-and-ready.html

  3. Looks like a great plan! I haven’t read Dave’s plan but I need to because I keep hearing really good things.

  4. wmwo says:

    Thumbs up 🙂

  5. MyMoneyMess says:

    Sounds like a solid plan. Smart to leave yourself a little buffer.

  6. Mercedes says:

    This sounds like a great plan to get your E-Fund established! I’m sort of doing the same thing to fund one of my savings accounts faster. I’ve moved all savings contributions into the one account so I can start spending the money to remodel my bathroom sooner than later! It’s nice to know I’ll have the cash on hand to pay for materials rather than just throwing it on my credit card and paying it off “one day”.

  7. This is a fantastic plan! Keep making those “Fetus” steps and pretty soon you’ll have a baby!

    Last year, my goal was to save $6,000, and I was able to meet the goal. It seems like a lot, but $500 a month is very manageable if you’re diligent. I’m running The Saved Quarter Challenge every Monday, encouraging people to save and share what is/isn’t working. I’d love for you to join us for accountability and motivation!

  8. Um. My only concern is Number 2. How much money are you paying for interest for one month? If it is a lot, you might want to reconsider and try to grab money elsewhere.

  9. Serendipity says:

    I loved the way you were able to just sit down, look at your budget and figure out where to cut from. I’m so tempted to do this myself so I can beef up my e-fund and work towards other goals. 🙂

  10. Great plan 🙂 I’ve gone back and forth on whether or not to do something similar with my efund, but am plugging along at my snail’s pace for the time-being. Eventually I’ll throw the $25 I put in my efund every two weeks on my debt too, but I’ve still got a way to go before I want to leave that account alone.

  11. Pingback: Net Worth Update: February 2011 «

  12. Pingback: $30 Broke the Bank «

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