How We Kicked Murphy Out for Good and Kick-Started Our Emergency Fund

Reading Time: 10 minutes

Picture this. You have no debt, an emergency fund that covers at least 3-6 months of expenses if you were to all of a sudden not have a paycheck coming in, and you don’t have to work a million hours a week.

Is that possible?

I’ll tell you it is. It’s not just a dream.

We’re solid proof that living paycheck to paycheck for years on end puts more strain on your life than anything else we’ve experienced.

Always feeling like you can’t get ahead. You can never make enough money. Everyone around you is doing all these wonderful things and taking vacations, and you’re just here trying to make your bills every month. You feel like money is always tight, and you can never really afford to buy the things you need.

Money magazine says that 78 percent of us will have a major negative event in a given ten-year period. Life happens, and we shouldn’t be surprised. Yet, 70 percent of Americans are living paycheck to paycheck and couldn’t even cover a $600 emergency.

That’s 7 out of 10 people down your street, yes, even in fancy neighborhoods. That’s 7 out of 10 people at your workplace. That’s 7 out of 10 of your family members. Well, that just got real personal, real quick.

In the fall of 2010, it’s exactly where we were. I thought that’s how life was and that we’d always be in debt, that we’d just have to learn to live with it, and work more and make a lot more money to afford life. Forever.

We were stuck.

We were stuck between hardly having enough for extra, and always feeling like our every-now-and-then extra was never enough. We were sick and tired of trying to make ends meet every month. We always had “just enough” to make it, so we never asked our parents or anyone for assistance. Even when we did have extra income here and there, we still couldn’t seem to get ahead.

You just grind it out every day of your life until retirement, right? You go to work, go home, eat dinner, go to bed… repeat. Until the end of time.

I mean, this is certainly ideal if you’re happy with that. Nothing wrong with that at all.

Something was always breaking. I would try to set money aside when I felt like we could, and every time I did, the money got used up on something that broke – again. Sound familiar?

All that aside, we always drove nice cars, had a nice home, nice clothes, and plenty of food to eat.

We looked just fine on the outside.

Did you know that you can have everything you need and still feel a huge financial burden on your life?

Did you know that you can have Jesus in your heart and still feel a huge financial burden on your life?

No one talks about this, but Jesus didn’t wipe away my physical financial debt for me. He wiped away my sins so that I could have a clean slate and access to the Father.

When I decided to start taking my Christianity seriously and follow Jesus, guess what? My credit card debt, student loans, and car loans were still there. Nobody miraculously paid it off for me. I still had to lay in the bed I made.

Debt is simply used to buy things we don’t have the money for “just yet.” We sign a paper that promises we’ll pay them back, plus interest. And if we don’t pay it back, well, they come and take it – well, because technically I don’t own it “just yet.” It doesn’t matter if you lose your job or get in a bad accident. It’s not yours; it’s theirs to take back if you don’t pay for the whole thing. You live with that risk hanging over your head. And it’s all good and fine as long as things are going good in your life, of course.

I didn’t say it was a sin to have debt. No where have I come across that in the Bible. But it does, in fact, hold you back from the majority of the peace you’re longing for. And you can bet that NO WHERE in the Bible is debt referred to as a good thing. Nope. Never. Nada.

The truth is, when Ernie and I came together for a solution, I started seeking out ways to “fix” this. Funny thing is – my prayers were answered in the form of Wisdom from friends and a book – wise words from people who have been there done that.

Sometimes the hard truth and wisdom aren’t widely accepted, even by Christians. I could have refused the book and told them “No, Thanks.” Instead, I was excited to learn about how money really works and willing to do what it took to get this burden off my shoulders.

I quickly learned that there were many people out there in the world making wayyyy less money than us, and get this – they paid off their debt and stayed debt-free, they had an emergency fund, and they were saving for retirement. I SO badly wanted that too. I could taste and even imagine not having any debt. Oh what freedom that would be!

Simply put, I just wanted to stop worrying about making bills on time every month.

Making a simple budget with pencil and paper was a start. I was already using an Excel spreadsheet to pay our bills on time every month.

But this month was different.

I wasn’t going to be able to make our entire house payment on time. I needed one more paycheck to work with here. I was trying to figure out if paying a mortgage late fee on the 16th would be cheaper than an overdraft fee from the bank. $35 late fee or $39 overdraft fee. It was something like that.

I swallowed my pride and told Ernie that we needed to do something. He said he heard a guy on the radio who said that everyone needs an emergency fund to get started. “People call in to his show and scream ‘We’re debt free!’ We need to check into that, and he says we need to save a thousand dollars.”

Hold up. A thousand dollars?

We can’t even scrape up enough to make our house payment, and we need a thousand?

Long story shorter, we began to scrape up everything we had by putting aside seemingly needed things, such as new clothing, birthday gifts, eating out, unnecessary trips to the store, and any little thing that wasn’t necessary for life.

We didn’t really have much to sell, but if we could have, we would have. Sell something or have a garage sale. Do what you can do to make that house payment and start building a starter emergency fund. Now.

This goes to show you that you can be organized with your finances and STILL not be able to pay your bills on time.

I was organized.

For goodness sake, I was using a spreadsheet every month to “organize” and pay our bills. It’s not all about organizing. Eighty percent of personal finance is made up of our behavior. Ouch.

So why all this talk about debt and not making our bills if I’m supposed to be telling you how to kick-start your emergency fund?

Because it plays the biggest part in setting your fully-funded emergency fund amount (which I will share in another post). If you have debt, you’ll need a MUCH LARGER fully-funded emergency fund later. And without debt, you’ll need a much smaller one later. That means it will take less time and headache to build up once you’re out of debt. What’s this mean? Get out of debt quickly.

But first, a starter emergency fund.

Why a “starter” emergency fund? Shouldn’t I save up a full emergency fund before paying off my debt? What if something happens and I need it?

In Dave Ramsey’s book, The Total Money Makeover, he teaches something called The Baby Steps. Step one is a Starter Emergency Fund.

FACT is – if you don’t do something very quickly, you will give up faster. You’ll feel like you can’t do it because it’s ta-king soooooo lonnnnnggg.

THIS IS EXACTLY WHAT HAPPENED TO US. The first time, back in 2010 before we hosted our first Financial Peace University, we saved it up very quickly. Within the next 4 years, life got the best of us, and we started to use up our starter emergency fund. Therefore, we needed to fill it back up so we could get back to our goal of paying off debt.

We started making more money, but it was taking wayyyy too long for us to save up for and HOLD ON to our starter emergency fund so that we could get to paying off our debt quickly. We were stuck.

Murphy’s law – everything that can go wrong, will go wrong.

Stuff kept breaking, “Murphy” moved in, and it felt like we just couldn’t get ahead for anything.

AND THEN WE HAD ENOUGH.

WE KICKED MURPHY OUT FOR GOOD.

Does this mean nothing ever broke again? No. Stuff still broke. But it was no longer a headache and dramatic event when stuff did break. A starter emergency fund does NOT cover large emergencies. It’s basically meant to sweep up those little disturbances that you would normally put on a credit card. It’s so you don’t go into more debt while trying to pay off debt.

This is exactly how we kicked Murphy out:

1. We had to do without.

But we felt like we went without all the time. I felt like we were already very frugal. Maybe that’s how you feel because you don’t “spend as much as your friends.” I’m not talking about your friends, I’m talking about YOU. I’m talking about bringing sandwiches for the kids when running errands – no Chick-fil-a stops. I’m talking about shopping at thrift stores for new clothes. I’m talking about not letting the kids join expensive sports activities just yet. I’m talking about cutting the cable and using the bill (let’s say $120?) to put toward your emergency fund.

CUT THE SPENDING and do without those things that you THINK you need, when in reality, you don’t. But don’t save all that money living like that only to turn around and spend it on unnecessary things when you’re trying to set up an emergency fund. Those little things add up – $20 here, $20 there, and before you know it, you’ve spent over $300 in two days and have no idea where it went.

2. Grow up.

If you don’t have the money for it, don’t pout about it, and certainly don’t put it on a credit card. You can save up and get it later when you’ve done the hard work of becoming more financially stable. Who cares about what your friends have or what your friends drive? Really? That’s not what defines who you are. Right now though, you’ve got to have an umbrella – because it’s going to rain!

Things happen, things break, and unless you like calling mommy for help when things go south, I suggest you put your big-girl (or boy) pants on and stop worrying about what everyone else around you is doing. They’re going on vacation? They’re eating out? So what. They’re probably in debt up to their eyeballs too. You don’t even know that they might be about to lose their house… and their marriage.

It took a lot of convincing for me to get Ernie to understand that we cannot buy a boat with debt. He got mad at me. I got mad at him. We argued. He threw a brat fit. And he’ll tell you to this day that he was wrong about the boat and that he’s thankful for where we’re at now. Now he coaches me on what I should and shouldn’t spend at the time. Teamwork.

We made a vow to never go into debt again because we dreamed of that feeling of freedom. Think FREEDOM.

3. Find a way to make a few extra dollars.

More money doesn’t always “fix” the money problem, but if you’re budgeting wisely, you can surely use that extra money to build up your fund and pay off your debt VERY quickly. This extra money is NOT to be used on holiday gifts, vacations, or new appliances “just because.” Those are things you budget for. You know holidays are coming, kids grow out of clothes, and you get flat tires. Those are not surprises. Set aside a little money for those things each month.

You set a goal for that extra money, and for a short time, you use that extra money to put toward your emergency fund and then start paying off your debt VERY quickly. DO NOT use it to buy a whole new wardrobe you don’t really need. Trust me, it’ll feel SO amazing to buy yourself a new wardrobe once you’re out of debt and have planned for emergencies.

Budget out all your necessary expenses first (housing, food, fuel, transportation), then use all extra money to immediately put into your emergency fund. Once you have that starter emergency fund, start paying off your debt in the same way you built up that $1,000.

When we kick-started our emergency fund AGAIN and actually held onto it, it was because we tried something different. If you want a different result, do something different!!

Sometimes you need a little boost to get things started.

In the summer of 2014, we had kids ages 7, 3, and nine months. I felt that if I could just make a little extra RIGHT NOW, that we could get things moving and shaking again. I got a server job at Olive Garden, and even my parents thought I was nuts for a little while. Before I knew it though, I was raking in hundreds of dollars per week in tips and finally putting aside some extra money.

It was hard work part-time, but it was fun. I had the kids all day while Ernie was at work, and then I’d work from 6 pm to closing and on weekends (about 20-25 hrs/wk). I knew what I was doing this for, and I knew it’d only be a short time. After about 3 months and over $3,000 later, we had our starter emergency fund and we were starting to pay off our debt again!

What do most people do when they get extra money? Spend it! Then, when an emergency strikes, they’re calling mom and dad for help or they’re putting it all on a credit card. Then a few months later, it happens again. Still no emergency fund. Deeper in debt. And the cycle continues.

It’s time to break that.

We stopped spending the extra money, learned to live without (even more), minimized our lifestyle, stopped going on vacation (for a short time in our life), etc. All those little things that kept coming up were no longer big things. This is where Creating More Life with Less was born.

The deeper you cut, the faster you can make progress. If it takes too long, you WILL give up (just like we did the first time) because it’s just so gruesome. And that’s a fact, Jack!

We’re now able to do the things we’ve dreamed of for a very long time. And we can do all those things without worrying about debt and not being able to cover emergencies. Phew!

I tell you now, without exaggeration, it was worth EVERY SINGLE SECOND of blood, sweat, and tears along this journey.

Stay tuned for next Monday’s post, when I tell you all about the surprise tragedy that happened a few months later. Just when you think Murphy is gone, something else happens that would’ve normally derailed our whole plan… But, because of our starter emergency fund… it didn’t.

Now go ahead and make your budget, sell something, reduce your spending, and start saving up and paying off debt. You won’t regret it!

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