When You Don’t Want to Be Making More Money

Having a child was one of the best decisions we ever made.  Seeing our son go from sitting up to crawling to walking to running and now parroting everything he hears (gotta watch what I say now!) has been a joy and a privilege to be a part of.  Raising a child has its ups and downs, but there is no sweeter challenge in my opinion.

Old Faithful

Through all the highs and lows of trying to corral the little guy long enough to shove some food down his throat, there is one thing that has always been there through thick and thin.  My wife, of course, but also our emergency fund.  While many people complain that you just can’t make any money in a savings account in today’s low interest environment, I would argue that having adequate emergency savings has allowed our family to avoid getting into credit card debt, which is huge.

Credit card debt is something we never plan to take on (have you read this article people?!), and it is our emergency fund that ensures this doesn’t happen.  I give the example of our son earlier, because we needed the emergency fund right when he came into the world.

Born to be Expensive

When you become pregnant, the doctor gives you an expected delivery date.  This is based on millennia of evidence that kids are usually formed in the womb and then released in about 9 months.  In our experience, however, consider the delivery date as a guideline, because that’s exactly what my son considered it when he decided to come out early.

He was slated to arrive in early January, an assessment that the doctor was “fairly confident” in.  Our son was fairly confident that wasn’t going to happen and decided he wanted out 2 weeks earlier.  Coming out a little earlier is fairly common, so what does the emergency fund have to so with it?  I planned to use 2013 FSA money (mistake #1) to pay for all the hospital costs, which were many.  Since he wanted to be born in 2012, that was no longer a possibility.  And since we didn’t really budget for the costs (mistake #2), we had to get the money from somewhere.

E-Fund to the Rescue

Luckily, ever since I got my first job I began socking away a portion of my income into a savings account every month.  Once I became an optometrist, this amount increased accordingly.  So we had a nice amount saved up and hadn’t touched it for a while.  All it took was a simple transfer from my savings account to my checking account.  No worries where the money would be coming from, no working extra to scrounge up the money, and more importantly, no going into credit card debt like most people end up doing.

Many people balk at having healthy a healthy emergency fund, or an emergency fund at all, because of the opportunity cost involved.  That is, money which is earning very little interest in an emergency fund could be earning much more money if invested in the stock market or in real estate.  This is most likely true, but it’s off point because the purpose of your emergency fund is to give you the ability to pull out money quickly when needed, which investing in the stock market or real estate will not allow (except a Roth IRA, which is just one of the reasons why it is awesome).  Having the ability to draw cash in a short amount of time should be a cornerstone of any financial plan, no matter what type of investor you are.

My emergency fund has saved my skin a bunch of times, and I would imagine it will keep doing so.  Unless you’re independently wealthy and have gobs of money just laying around, having a well stocked emergency fund will give you piece of mind and keep you out of the red.



  1. Babies certainly do have their own time frame. My sister just had her third, ten weeks early! Thankfully, they are financially stable enough to handle the deductible and time off work. I can’t imagine paying for a NICU stay without insurance.

    • Syed says

      Wow ten weeks early! Surprise! They really do run the show. We’re just along for the ride. Having enough for deductible is a good start for sure.

  2. I was a month early. Apparently, I ruined a camping trip.

    I do want to eventually invest in stocks (outside of an IRA) or real estate, but I need that boring, low-interest money in an EF and savings account first. It’s my safety net that will allow me to fret less as our portfolio will inevitably take dips.

    • Syed says

      That highly liquid money is a necessity. Maybe you can plan an awesome camping trip to make up for it!

  3. Luckily, both of our babies came when expected. However, I am totally with you on the e-fund. We’ve had to use ours multiple times over the course of the last few months…and I’m so glad we had the money there, ready to be used!

    • Syed says

      Yeah it is a lifesaver. The idea of pulling money from retirement accounts or getting into credit card debt does not sound too appetizing.

  4. With a little guy, we are even more committed than ever to keeping our cash levels on the high side. Of course, I don’t want to be a wasteful consumer just because we have a kid, but I also don’t want to be stressed about the six trips to the doctor to get an ear infection diagnosed, or any other unforseen costs associated with having a kid (we’ve been lucky, so I can’t come up with examples other than medical off the top of my head).

    • Syed says

      Yeah the medical stuff can be the worst, because it is so stressful seeing your little baby in pain, and then the bills start coming. Hope both our kids stay happy and healthy!

  5. To be honest I haven’t heard many people knock emergency funds. I think people debate how much they should be, but not whether or not to have one.

    • Syed says

      True, but there are certainly a vocal minority that recommend forgoing emergency funds in favor of stocks or debt payoff. They’re living on the edge.

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