Emergency Fund Growth The Tortoise Way

Our emergency fund at ING has $1300 in it.   This isn’t even close to three months worth of expenses, but it’s $1300 more than we had on January 1, 2007.   We had opened an ING account in January of 2006, but we had pilfered it a few times that year, and by the end of 2006, there wasn’t much in it.   So at the beginning of last year, I decided that we were going to truly designate the ING account as an emergency fund.   Which meant that anything short of a dire emergency didn’t merit a withdrawl.   We’ve had a $100/month deposit going into that account ever since we opened it.   So throughout 2007, each month the balance would grow by $100 (plus a little interest, which is a  nice bonus).   We just pretend that the account isn’t there, so we’re never tempted to take money out.  

$100/month doesn’t seem like a lot of money.   I can’t really say that we ever miss it.   But $1300 does seem like a lot of money to us.   The monthly deposit to the account is automatic, so we never have to think about it.   So without much effort at all, we’ve grown a little emergency fund.   Proof that baby steps repeated over and over will get us where we want to be.

Since we haven’t withdrawn money from the account in over a year, we’ve gotten to the point where we forget that the money is there, and just keep plugging away with our $100 contribution each month.   So I’m hopeful that this year will be emergency-free and that we’ll have $2500 in the account by December.   It’s nice to see our little puddle growing into a pool.