Why I’m Increasing My $1,000 Emergency Fund and Slowing Down My Debt Payoff

I haven’t been to my workplace in over a week. Normally, this would be cool and allow me to be more efficient, have more time to work out, and knock out a few items on my to-do list.

However, it’s not so cool because I’m working from home due to coronavirus cases popping up all over the San Francisco Bay Area (where I happen to live).

I want to say first that I am extremely privileged to have a job that allows me to work from home, have the flexibility and in that I will be paid without having to clock in or clock out.

But due to the cancellation of concerts, sporting events, my library closing, and not having a car, I am at home A LOT.

All of this time at home has allowed me to think much more about the impacts of the coronavirus, the possibility of me or my husband contracting the virus, and possible quarantine. Not to mention that we live in Silicon Valley which is already stressed out on resources during a normal day but adds a virus to the mix and its total chaos.

This extra time thinking has made me consider beefing up my emergency fund. I’ve had an emergency fund of only $1,000 for the past four months. I am following Dave Ramsey’s baby steps and baby step one is to have a beginner’s emergency fund of only $1,000 and then to move onto paying down all debt except for the house.

Normally this wouldn’t bother me but now I’m reconsidering. I read and consume personal finance information from multiple sources. I have never been 100% on board with Dave Ramsey’s baby steps but I’m using it as a launch point. I’ve found that it’s helped me curve my behavior and dedicate more money towards debt paydown instead of just letting it park in my savings account.

But what if my mother gets sick? What if my brother gets sick? What if I get sick!!!

I’m grateful that I have a salaried role along with commission. But I work in education technology that is being affected by the coronavirus. A lot of schools are shutting down and moving to online instruction. This is actually good for my company. However, because of the frenzy, most schools and administrators are focused on the health and safety of their staff and students. They aren’t worried about buying new curriculum software.

It’s tough working in sales right now during this trying time. I have to make peace with the idea that my commission might be affected.

Increasing my emergency savings fund from $1,000 to three months of my basic expenses just in case my income will be affected or I might have to assist a loved one. When I say basic expenses, I mean basic. No Amazon Prime, no Netflix, no shopping, no nothing!

I’ve given much thought to this and feel that it’s the wisest action for me to make until the summer. I will now be increasing my emergency fund to $6,000 to take care of three months of expenses and continue paying the minimum payment on my last credit card.

I’m not happy about it, it’s breaking the baby steps, but it’s the best thing for my family and me right now. I’m not going to give up paying down my debt forever, just slowing the snowball down to a few snowflakes until I can beef up my emergency savings.

If you have also changed your debt paydown or financial independence strategy for any reason at all, feel free to comment and share your thoughts.