{"id":34023,"date":"2018-06-21T16:38:28","date_gmt":"2018-06-21T16:38:28","guid":{"rendered":"https:\/\/one.sightlinemg.com\/marinecorpstimes\/uncategorized\/2018\/06\/21\/heres-how-to-get-your-emergency-fund-started\/"},"modified":"2026-08-08T03:00:24","modified_gmt":"2026-08-08T03:00:24","slug":"heres-how-to-get-your-emergency-fund-started","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/marinecorpstimes\/pay-benefits\/mil-money\/2018\/06\/21\/heres-how-to-get-your-emergency-fund-started\/","title":{"rendered":"Here\u2019s how to get your emergency fund started"},"content":{"rendered":"\n

An emergency fund gives you a cushion to deal with all sorts of unexpected financial setbacks<\/a>, whether it\u2019s those extra expenses during a military move<\/a>, the loss of a spouse\u2019s job, sudden car repairs … the list goes on.<\/p>\n\n\n\n

It\u2019s an important foundation for your financial well-being, and can help avoid stress. \u201cIt keeps you from having to use a credit card<\/a>, borrow from friends or family or sell something when life throws you a financial curveball,\u201d said JJ Montanaro, a certified financial planner with USAA\u2019s Military Advocacy Group.<\/p>\n\n\n\n

\u201cAs an added benefit, it can head off arguments on the home front,\u201d he said. \u201cIf you\u2019re able to respond to a financial mishap by using savings, it\u2019s still painful, but definitely less stressful.\u201d<\/p>\n\n\n\n

Montanaro suggests eventually accumulating a fund that could cover three to six months\u2019 worth of living expenses such as rent or mortgage, car payments, utility bills, groceries and other costs.<\/p>\n\n\n\n

\u201cDespite a secure paycheck, if I were looking at the nuances of military service and an emergency fund, I would favor the high side of the emergency fund spectrum,\u201d Montanaro said. \u201cThe one certainty about military service is that we all eventually take off the uniform, and having a year\u2019s worth of expenses covered can make the difference between landing a dream job and having to take the first paycheck you can find.\u201d<\/p>\n\n\n\n

For many people, accumulating that cash is not something that can happen overnight. For example, if your rent and utilities are $1,500 a month, your car payment is $200, and groceries are $500, that\u2019s $2,200, for starters. A three-month stash would be $6,600.<\/p>\n\n\n\n

The important thing is to make a start; $500 to $1,000 can make a difference. Could you manage $1.37 a day, or $42 a month? That adds up to $500 in a year\u2019s time.<\/p>\n\n\n\n

\u201cWe suggest building an emergency fund of $1,000 before paying more than minimums on existing loans and debts,\u201d said Eric Smith, a retired Army colonel who is military adviser for Dave Ramsey\u2019s Financial Peace Military<\/a>. \u201cWe suggest building the fund from existing savings, sale of stuff or picking up an extra job.\u201d<\/p>\n\n\n\n

After you build that minimum, then focus on knocking out the debt, Smith and Montanaro said.<\/p>\n\n\n\n

\u201cIt\u2019s hard to justify having a lot of cash sitting on hand earning a paltry return when you\u2019re paying big-time interest on a credit card,\u201d Montanaro said. \u201cHowever, building a small emergency fund can keep you from adding to that debt, create a good habit, and be a foundation to build on once the debt is in your rearview mirror.\u201d <\/p>\n\n\n\t