Dave Ramsey's Baby Step 2 is to "Pay off all debt using the Debt Snowball" and Baby Step 3 is "3-6 Months of Living Expenses in Savings." We, unintentionally, switched these two items. As I wrote about yesterday, in the months leading into our marriage I was employed full-time and living with my parents with minimal living expenses. I set a a goal early on to save $15,000 by our wedding day. I was well on my way to that goal until I was laid off that February. However, by watching my spending and saving my earnings from babysitting and subbing we entered marriage with $12,000+ in our savings account. We also were able to add money thanks to our generous friends and family who attended our wedding. We quickly realized that based on our apartment rent, utilities, etc that we had more than six months of living expenses saved! :) Step 3 Complete.
For better or worse, Richer or poorer
All the days of our lives.
We have worked continuously over the years to always keep that much in our savings. As each of our father's have been laid off during our marriage we have really seen the value of having a good savings built up. Because Mark works in Law Enforcement we often feel somewhat safer than families that work for less stable fields. However, we are aware that things can change in an instant. After Mark's knee injury in 2011 and following surgery in 2013, he was not able to work his part-time job. While we don't require that money to live it is the money that we do our fun and extra things with. We were so thankful that we had that money in savings and that we did not have to worry about him returning to work before he was fully healed.
I think for peace of mind, this is probably the most important step. Knowing that if someone in our family has surgery, has a serious medical issue, or if we have a huge incident with our house that we have the money to cover it. The few times we have dipped into this fund we have built it back up as quickly as possible afterwards.
See you tomorrow for Day 3 and Baby Step 2!