How Saving Less Helped Me Surpass My Emergency Fund Goal

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Ashley has been working her Financial Trainer, Crystal, since July 2018. She's a lifetime nerd and homebody, who loves granny hobbies, working out, and meditating. She's originally from New York, but has called Boston home for almost a decade.

The one true tenet of personal finance is that there is not one-size fits all approach to money management. Your financial circumstances are as unique as your fingerprints, but there are pieces of advice that are worth it for everyone. There’s no way to know a rainy day is on the horizon, until you face exorbitant medical bills from an unexpected injury, your car gasps its last heaving breath, or your company folds and you’re left in the lurch. Everyone needs an emergency fund, and my Financial Trainer, Crystal, made building mine out to cover 3 months of living expenses the top goal in my financial plan.

I had been maintaining my savings and retirement accounts, but I had also been ruthless about putting my pennies towards coming out of student loan debt. I had also been aggressively saving for retirement (about 40 years out). Crystal described my saving priorities as putting a great roof on a house with no foundation, and once she put it that way, I could get onboard. The part I had a bit more trouble believing, was that by putting away less money every month, I could reach my emergency fund goal in less than a year. As counterintuitive as it sounds, it worked, and I can even explain why.

You wouldn’t catch me on Extreme Couponing or any of those TLC shows, but I’m pretty good at Postgrad Lifestyles™. I have roommates, meal prep, and live for free Netflix nights on my couch. As far as I was concerned, saving almost half my monthly income was the way to go. It worked on paper, and made logical sense, but it didn’t fit in with the full picture of what I was trying to accomplish, which I didn’t see until Crystal laid it out for me. She suggested that I reduce my monthly emergency fund contributions by $166 so I could have more flexibility with the rest of my budget. I was open to giving it a shot, and I discovered how much easier saving was when I trusted the good financial habits I’d already established and stopped hiding my money from myself.

Part of the mental block I had was that I was afraid that I would become a spending fiend if I loosened the reins, but part of living life is that sometimes you’re going to splurge, and even though I went out to eat 5 times in August, I did not ruin my life! In fact, I had a lot of fun catching up with friends and trying new cocktails. Not only that, I had the lightbulb moment that had been waiting for me; saving isn’t supposed to be about deprivation, it’s supposed to be about balance. Epiphanies aside, reallocating funds really did it for my Emergency Fund.

I saved $5K in 7 months, and I was able to throw any additional income in as well, because my day to day expenses were already well covered. I was even able to break a sneaky habit I didn’t realize I was forming - pinching $40 here and there from the cookie jar. I knew I was over-saving, so I conflated Emergency/Slush fund a bit. We rebranded all my accounts in my Financial Plan, and now my, I Want It, I Got It and 911 accounts are completely exclusive.

I’m not done building my Emergency Fund just because I reached this goal. I’m going to continue my contributions and my work towards my other goals in a way that works best for me and my values. I know everyone’s financial landscape is different, and that the horizon will change throughout your life, but working with yourself instead of against yourself is always the way to go.

If you’re interested in learning more about The Financial Gym process and how our team of Financial Trainers can help you reach your goals, schedule your FREE 20-minute consult call here