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29 Aug 2011

Emergency Fund

The story of my personal emergency fund is that---its non-existent. I know, pretty unbelievable. My point is that, I have access to funds in one of the properties.  We have paid up that one property as we were kind of saving our extra income in it. Anyway, I decided to have a separate emergency fund, yipee. Now, I can speak like a PF blogger.

On a serious note, the urgency of the EF is not brought by me wanting to follow PF blogger guidelines, if they even exist. I need it for two reasons,
  1. with my properties needing this and that at awkward times;
  2. the shock I had when I looked at how much I've spent during our last week long holiday made me realise I'm not as PF savvy as I wish. I'm far from frugal, not even close. And I don't make as much money as I made with a full time job.
So now, the only way is setting my emergency fund. I am starting with R1000 per month with R30000 target. That means I need 30 months if the contribution stays stable and I have no emergencies along the way. I don't know if I will be that patient. I will need to double this amount to reach my target in just over a year. Now that sounds more exciting.

I am not even sure if R30,000 is all I need for emergencies between 5 properties and a car that hardly leaves the garage. Its great motivation though, so I reach the target in this lifetime. Three years sounds like another lifetime. Now, where do I get R2000 to stash aside in the EF? I obviously have to cut my shopping, draw a budget when traveling and especially stick to it. I now know I'm not to be trusted with money, at least not to be trusted with my money. I do very well with other people's, like tenants' deposits.

My rental income grew by about R1500 in August. Another R500 is what I've been wasting in unnecessary shopping. Magazines come to mind, I will have to do with books for now. There comes the R2000. Easy, isn't it. Emergency F, here I come.


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