Baby Step 3: Fully Funded Emergency Fund Update5 min read

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baby steps progress

So, all the hard work has finally paid off! We finally hit our magic number in our emergency fund and I made the transfer on 8/11/15 to finish it up! This is a very exciting moment since it means that we have  finally set a solid foundation by paying off all debt but our home mortgage and getting a 3-6 month emergency fund in place. We are now set up to focus on taking our extra money and begin investing it into long term growth. It has really been a long road for us to reach this milestone and took us longer than most people because of a couple setbacks I like to call “life”. I don’t think that it’s a problem that it took us this long, but we did have a few things come up on our journey.

emergency fund monthly graph

The Journey

We officially became debt free except our house on June 11, 2013 when we made our final payment on our student loan. It was a glorious day, but we knew that we had another hill to climb, the emergency fund.

We did take a few months off after paying off debt to enjoy life a little and that’s why from May 2013 through August 2013 we stayed right around the $1,000 mark. In September 2013, we had a family member that wanted to borrow $1,200 and we loaned it to them to help them out. We should have given it to them but, things worked out and our relationship wasn’t changed in the long term.

Around July or August of 2013 we decided to try for our second child and ended up pregnant. The really nice thing about being on baby step 3 during a pregnancy is that you are supposed to pause everything and put as much money into savings as possible anyways. This was where we were at anyways and you can see our growth from November 2013 to May 2014 where we went from a little over $1,100 to almost $10,000. We were working hard to put that money away since we knew that we wanted to have Jenni home for a full three months of maternity leave.

At the time Natalie, our second was born, we also purchased our second vehicle to replace our 1992 Honda Accord. We spent just over $5,000 to purchase our 2001 Ford Escape. I kind of got car fever and decided that our family “needed” a second vehicle that wasn’t falling apart since we were going to be traveling with two children. To be fair, the 1992 Honda Accord had no A/C, the driver’s window didn’t stay on the track, the car had trouble starting when it was very cold out and it was approaching 240,000 miles. We knew we had the cash on hand and it would set us back from completing our emergency fund sooner, but we were ok with that.

The next 3 months while Jenni was on maternity leave, we weren’t able to contribute anything to our fund since we were living on a lot less income. We were able to get by on her maternity pay and my paycheck without going into savings though, which was awesome!

Starting in September or October, after Jenni had gone back to work, we started to get serious about knocking out the emergency fund. In October, I actually took on a second job delivering pizzas for one of my buddies that was just starting his own place. We were able to throw all the money that I made from this job into the emergency fund. The reason for doing this was because with two kids in daycare, most of our discretionary money was being eaten up. I didn’t feel we were making good enough progress, so Jenni hunkered down to chase the kiddos while I drove around making people happy getting pizza.

I continued this pizza delivery job up until Jenni was able to take a new job and advanced her pay quite drastically. But, the move meant I would have to help out more with pick up and drop off of the kiddos. So, I was able to help my buddy transition and replace me so I didn’t leave him in a bind and was able to help more with the pick up/drop off schedule.

Since Jenni starting the new job, we have marched steadily towards growing our emergency fund. Actually, last month being July, we were able to sell an extra vehicle that was given to us and even bump our emergency fund up to being finished almost an entire month sooner, which was amazing. With that being said, we were able to take complete advantage of having three paychecks in July and were able to transfer the last of our emergency fund in on August 11th, completing the fund and making it so that the money can sit in the account and collect a little interest here and there. But, more importantly, we will have it to save our butts should something happen.

Where Is Our Money Going Now?

So, now that we have our emergency fund done, where are we going to stash all that moolah going forward? Well, the baby steps say to start putting 15% of our gross income into retirement. We are currently at 4.1% since I bumped Jenni’s retirement account up and I can’t increase my contributions until around December since we can only change them twice a year. This is fine with us though. We are planning to save up and do some extra work on our basement and also finish up funding for our vacation season that we are putting together for next year as well!

We are going to slowly up our investing as we learn more and feel more comfortable with it. At this stage in our lives with two kids in daycare, those costs eat up almost 20% of our monthly budget right now as it is and really make things tight to do the full 15% right off the bat. I think as time progresses and we are able to cut in different areas of our budget, we will see that we are able to eventually get this number up higher, especially once the kiddos are done with daycare.

So, at this time, I am going to relish in celebrating this great milestone and work towards completing the next baby step as quickly as we can!

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Steven Goodwin

Owner/Blogger/Consultant at MyFamilyOnABudget
Steve Goodwin, a stay-at-home dad of two girls is passionate about finances and is helping others just like you get out of debt and build wealth handling money God's way. His goal is to inspire people like you to gain control of their finances by destroying debt and building wealth using their cash flow.
Posted in Emergency Fund, Finances, My Testimony and Story, Working The Baby Steps and tagged , , , , , , .


  1. Wow Steven! Congrats to both of you! What a fantastic accomplishment to finish Baby Step 3! I enjoyed reading your back story and seeing how you guys have persevered. Love it that you even took it upon yourself to deliver Pizza too! Looking forward to continue walking with you on this journey to financial freedom.

    • Thanks Jonathan! Yes, it is a breath of fresh air to be done with this baby step. Life just happens and I wanted to show that it is to be taken in strides, but as long as you do persevere, you will get to your goal if you try hard enough.

      Yeah, the pizza place was fun and we did sacrifice a bit of our time to make it work for a time, but it was all to achieve our goals. Have a great day and thanks for taking the time to read!

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